Argentina had been called the comeback kid of the global economy. The President of Argentina had been appreciated for his contributions in bringing the country back on the right path financially. However, in the previous week, the value of the currency dropped to low levels and the Treasury Minister had to travel to Washington in order to sign a deal with the International Monetary Fund.
How Did the Crisis Begin?
Argentina had been affected by economic problems for many years but the country has been repay all its debts to the International Monetary Fund because of the commodities bloom which had taken place in the country. Argentina is now free from all the debts to the IMF which was taken in 2007. Under the able leadership of President Néstor Kirchner who held office from 2003 to 2007, the economy of Argentina had improved and had become more stabilized.
The economy had become wobbly and shaky under the leadership of his wife and successor Cristina Fernández de Kirchner. She had office from 2007 to 20178 and had increased public spending, nationalized many companies and had hugely subsidized many items which are used on a daily basis. The exchange rate was controlled and it had given birth to numerous practical problems like the rise of the black market for dollars and the hugely distorting prices.
Promise Made by President Macri
President Macri had promised to put a full stop to the distortions and he had promised to return a market-oriented economy to the country. During his first days in the office, he had ended capital controls and had commenced a global campaign to improve the reputation of the country in the eyes of the foreign investors. He had also promised to reduce inflation which at present, was around 40 percent per annum by cutting down on public spending.