Argentina: new face, old problems

published 31 October 2019

Argentina elected left-winger Alberto Fernndez as president on Sunday, with the Peronist triumphing over centre-right incumbent Mauricio Macri. Macri's term was dogged by an inflation crisis, which ended in a $56bn International Monetary Fund (IMF) bailout.

Macri's "business-friendly" presidency ended in disaster, says The Economist, but the Peronists who preceded him had an "equally calamitous" record. Cristina Fernndez de Kirchner, Argentina's deeply divisive, economically illiterate former leader, is the new vice-president. It remains to be seen how much influence she wields.

The new president inherits a government "saddled with more than $100bn in foreign debt", say Santiago Prez and Ryan Dube in The Wall Street Journal. The IMF rescue deal is conditional on the austerity measures that "Fernndez campaigned against". Fernndez has promised to end the crisis but has no access to external financing, says Benjamin Gedan of the Wilson Center. "Populism without money is impossible." But almost half of the IMF's current loans are thought to be owed by Argentina. So a period of hardball negotiating and debt restructuring seems inevitable.

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That said, "broader Latin American markets have largely shrugged off" the drama, says William Watts on MarketWatch. Argentina's stocks make up less than 2% of the regional benchmark, which is weighted towards Brazil and Mexico.

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.