With macroeconomic results like we have seen in Argentina of late, it would be hard for any government to win re-election.
Over the past four years, inflation has soared from 50 to 140 percent, with many analysts arguing that 300 percent is likely next year.
While unemployment is low at only 6 percent, the purchasing power of salaries has also lost 6 percent during President Alberto Fernández’s administration, with unregistered workers suffering a much steeper decline of around 20 percent.
As a result, an estimated 42.9 percent of Argentinians live below the country’s poverty line, a significant jump from the 35.5 percent at the beginning of the ruling Peronist administration.
In addition, Argentina has accumulated massive economic imbalances that point to an even worse situation in 2024, with a persistent budgetary shortfall as well as a foreign trade deficit. Massive currency devaluations have only been postponed thanks to foreign loans, including an USD 11.5 billion one from China, but they are likely to come after the election.
The country has some of the strictest and most convoluted restrictions on foreign trade in the world, and there are more than a dozen different exchange rates for the Argentinian peso against stronger foreign currencies. Recently, these chaotic regulations have led to fuel shortages in many parts of the country, while many industries are struggling to buy inputs and spare parts to keep production steady.
Nevertheless, Economy Minister Sergio Massa has a real chance of becoming the country’s next president on November 19.
In large part, his competitiveness is enabled by his runoff rival: firebrand libertarian economist Javier Milei. He has built a large following by taking aim at Argentina’s “political caste” and calling for the “burning of the central bank” on television and social media, but Mr. Milei’s extreme ideology and bizarre personality traits have also raised massive concerns about his suitability for the presidency.
His original campaign platform included calls to privatize healthcare and education, and the candidate even spoke favorably about the possibility of allowing a free...
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