Argentine Default: Here We Go Again

Argentine Default: Here We Go Again

What the New Peronist President Has in Store for Creditors
The new economy minister, Martín Guzmán, will lead the negotiations. Argentine default (Alberto Fernández)

Argentine Default: Here We Go Again

1170 658 Paz Gómez

After a four-year hiatus, Argentina resumed her predilection for socialist governments by swearing Alberto Fernández into office in December 2019. Like many Argentine presidents before him, he faces the huge challenge of steering the Argentine economy out of a self-inflicted crisis.

Mauricio Macri, the outgoing conservative president, failed to live up to his promise of poverty reduction and liberalization. Rather than tackling the root causes head on, he adopted a gradualist approach leaving untouched Argentina’s expansive welfare state, which devours three-quarters of the annual government budget.

Inflation and unemployment picked up as market confidence in Macri’s economic plan plummeted. The International Monetary Fund (IMF) agreed to bail out Argentina with a $57 billion loan, the largest in IMF history. Now Argentina is struggling to honor her financial commitments and the menace of default looms large yet again.

Backgrounder’s Content

  1. What is the state of Argentina’s economy?
  2. How much outstanding debt does Argentina have? What is her credit rating?
  3. Who will lead debt negotiations? What have creditors said?
  4. Is the new government willing to repay Argentina’s IMF loan?
  5. What is the incoming administration’s plan to turn the economy around?
  6. What have been the first economic measures?

Previous Coverage

Incrementalism Has Failed Argentina,” by Daniel Duarte.
Argentina’s Taxes the Fastest Rising in Latin America,” by Paz Gómez.
Argentina Defaults on Gas Payments, Foments Standoff with Bolivia,” by Paz Gómez.
Warning: Argentine Default Imminent,” by Fergus Hodgson.

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Paz Gómez

Paz Gómez

Paz Gómez is the Econ Americas policy analyst. She is cofounder and academic coordinator of Libre Razón, a liberal think tank in Quito, Ecuador. She holds a bachelor's degree in international relations and political science from San Francisco University of Quito. Follow @PazenLibertad.

All stories by:Paz Gómez
Paz Gómez

Paz Gómez

Paz Gómez is the Econ Americas policy analyst. She is cofounder and academic coordinator of Libre Razón, a liberal think tank in Quito, Ecuador. She holds a bachelor's degree in international relations and political science from San Francisco University of Quito. Follow @PazenLibertad.

All stories by:Paz Gómez