Argentines Turn To the Polls To Avert Economic Crisis And Peso Volatility
High inflation levels, which candidate is better suited to tackle a worsening economic crisis, are the key talking points as Argentinians prepare to go to the polls this month. The country is struggling with one of the highest levels of inflation at 54%. High inflation levels have affected the way of life, as prices of goods continue to rise, and small businesses struggle to remain afloat.
Small businesses have already started feeling the pressure as investments continue to dry up as a cautionary measure. Policies implemented by the current regime have failed to have the desired impact, consequently plunging the country into one of the worst economic crisis in more than a decade.
The economic slump threatens the regime of President Mauricio Macri, who is under immense pressure and scrutiny. The president has already suffered his major loss in the primaries on losing to leftist Alberto Fernandez.
The economic crisis, as well as political uncertainty, has continued to weigh in on the country’s currency, the Peso, which lost more than 20% in value after the primaries. Business owners have since had to plan for the eventuality that might come into being ahead of the next general elections amidst the high inflation levels.
Some entrepreneurs have created different contracts when dealing with clients while others have had to cut back on new investments, as the Peso remains exceptionally volatile. Some have had to shift focus to other much stable currencies, such as dollars, for transacting as a way of circumventing the unstable peso.
Unlike other economies in the world, Argentina's economy is a bi-monetary of which the US dollar occupies a big role in the economy. Whenever the Peso depreciates, people are most of the time forces to rush to the dollar to counter the effects which most of the time involve a spike in prices for goods and services.
Consequently, high inflation levels have not only affected the value of real wages but have also affected consumption in the markets. People can no longer buy goods and services as they used to in the past, a development that is having a ripple effect on the business ecosystem.
Elections To The Rescue
The president has tried to curtail the high inflation levels and stabilize the Peso by delaying the payment of the country’s debt. Currency controls have also come into play, but as it stands, the measures have had minimal or no impact at all.
The general elections present an opportunity for Argentina to avert a potential repeat of 2000 to 2001 economic crisis. At the time, many people lost their savings as the Peso lost a significant amount of value.
Concerned by the way, Macri’s management of the economy has failed, some people are hopeful that changes at the top leadership could rescue the situation. Even as some people remain hopeful that an election could bring a ray of hope, some are already contemplating leaving the country to escape the worsening economic crisis.