Today, a workers’ strike is expected to take place across Argentina. The South American country has been hit by mass
Today, a workers’ strike is expected to take place across Argentina. The South American country has been hit by mass protests for the past month, mostly demanding the government address the country’s worsening economic crisis. Inflation is running above 50%, and the economy is expected to contract by 2.6% this year.
The poor economic outlook combined with the current government’s austerity policies make it likely that President Mauricio Macri will be defeated in the upcoming October 27 presidential elections by left-wing candidate Alberto Fernandez.
Should he win next month’s vote, Fernandez is expected to roll back the austerity measures, thereby lessening the strain on ordinary Argentinians and bringing some political stability.
However, in the medium to long-term, a Fernandez presidency will face considerable difficulties. Without a commitment to austerity, Argentina will struggle to pay off or even restructure its immense debt—$50 billion of which is due next year. Fernandez could default on Argentina’s obligations and avoid paying the debt, but that would severely shake investor confidence and restrict Argentina’s access to capital, limiting his ability to fund social spending programs.
Unless Fernandez can somehow negotiate these difficulties, a swift return to social unrest remains in the cards.
Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.