The Argentina Debt Crisis and its Roots

In Argentina of Mauricio Macri arrival at the end of 2015 raised high expectations from the international community. His program included wide-ranging structural reforms aimed at boosting the economy by reducing state intervention and reopening the country. Nevertheless, three years later the country faced a crisis of confidence and the inability to finance its twin deficits (public and current account), and was therefore forced to negotiate the largest program in the IMF's history. The following year, the Peronist party returned to power in the midst of a deep economic recession. The country had to restructure its external debt, which had risen sharply during the four Macri years. This article analyzes the Argentina economy during this period and tries to identify the reasons that led to the failure of the government's economic program, putting it in perspective with recent history. As in the past, the roots of the crisis lay in the gradual rise of macroeconomic imbalances, particularly marked by the fiscal and current account deficits. The failure of the inflation-targeting regime that was at the heart of the program reflects the need to carry out institutional reform and promote central bank independence.