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Argentina's Economic Recovery

Argentina, along with much of Latin America, suffered an economic downturn during the 1980s. However, with the Menem administration (elected in the late 1980s), the country undertook a series of economic reforms designed to bring the country out of its economic doldrums and into a new era of prosperity. Many of those reforms had the desired effect so that by 1994, the country had seen its economic situation improve dramatically; this was reflected in the nation's financial markets. The nation suffered an economic recession in 1995, but further steps taken by the government have strengthened the economy to the point that by 1996, performance had returned to 1994 levels. Argentina endured a recession during 1994 and 1995, but its long-term economic performance is expected to be strong. This research considers the economic recovery that the nation enjoyed during the early 1990s and the outlook for the Argentinean economy in coming years.

Argentina's Economic Situation in the 1980s

When President Carlos Saul Menem delivered his inaugural address in 1989, his country was facing hyperinflation and a loss of confidence by world economy's in the country's nearly bankrupt government. As a region, Latin America had external debt of $26 billion with 75 percent of that amount owed by only five nations: Argentina, Brazil, Chile, Mexico and Venezuela. Overall economic growth for the region had dropped to nearly zero, and per capita gross domestic product (GDP) had dropped seven percent since 1980. As a percentage of GDP, investment was 6.3 percent lower than in 1980. Net capital inflows into the region fell from $12.3 billion in 1987 to just over $1 billion in 1988, and foreign exchange reserves fell by more than $10 billion over the same period (Brady S26). Within Argentina, hyperinflation (114 percent for June 1989) brought the nation's economy to a standstill and confidence in the government's ability to repay its loans was nearl...

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Argentina's Economic Recovery. (1969, December 31). In LotsofEssays.com. Retrieved 22:36, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1706046.html