Economic success will elude Macri in Argentina

Significance

The 2018 currency crisis left the economy in one of the deepest downturns of the last decade, repeating the cyclical pattern in place since 2011 of one year of growth followed by one year of downturn. Lower real incomes and rising interest rates discouraged private consumption and investment, hitting the performance of industries including manufacturing, construction and services.

Impacts

• A larger soya harvest will not be enough to prompt significant economic rebound.
• Lack of confidence in the peso will keep interest rates high.
• With exports accounting for 20% of GDP, the impact of depreciation will not be significant.