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Macri’s Disappointing First Year in Argentina

When President Maurizio Macri came to power in December 2015, his administration needed to address Argentina's fiscal and external imbalances, without undoing the progress in social inclusion that had been made over the previous decade. His approach, based on four key pillars, has not achieved that.

NEW YORK – Argentina’s economy is struggling. Last year, the country suffered stagflation, with GDP dropping by 2.3% and inflation reaching nearly 40%. Poverty and inequality increased; unemployment rose; and foreign debt grew – and continues to grow – at an alarming rate. For President Mauricio Macri, it was a disheartening first year in office, to say the least.

To be sure, Macri faced a daunting challenge when he took office in December 2015. The economy was already on an unsustainable path, owing to the inconsistent macroeconomic policies that his predecessor, Cristina Fernández de Kirchner, had pursued. Those policies led to imbalances that eroded the economy’s competitiveness and foreign reserves, pushing the country toward a balance-of-payments crisis.

But Macri also pursued a flawed macroeconomic policy approach. His administration needed to address the fiscal and external imbalances, without undoing the progress in social inclusion that had been made over the previous decade. His approach, based on four key pillars, has not achieved that.

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