Argentina's Economic Crisis

 

Argentina faces economic hardship. The country appears to be seeing a form of hyperinflation. The Argentine peso is losing value. This explains why some might exchange their pesos for US dollars instead. The government has in response limited the number of dollars citizens can by at the current exchange rate. Politicians pretend that the recent development was some random act, but there ahs been a pattern of economic instability. The 2001 crisis proved that it was a combination of institutional failures, deposit freeze, and a default on public debt trigged economic turmoil. IMF policies have not secured the economy of Argentina. Just like in 2001, the new economic downturn will generate more poverty. People who were financially secure will see themselves impoverished. Many were not able to recover their deposits from the 2001 crisis. The Argentine public has grown even more suspicious of the banking system and government. The fear of the devaluation of the peso is present. There is also an indication that Argentina lacks hard currency and is not taking in more money. The crisis has made it more difficult for business to operate. Without specific costs known, running an establishment is not possible. Inflation will harm or eradicate small business, before bigger corporations. Argentina plans to accept an IMF $ 3.9 billion deal. IMF agreements have never solved Argentina's economic concerns and the new deal has limited chance of success. The economic crisis has gotten so severe that President Alberto Fernandez will not seek another term. Argentina's crisis is a warning to the global economy and the fragile nature of the banking system.