Recession emboldens Argentina’s opposition

The EconomistASKED recently to rate his first year as Argentina’s president, Mauricio Macri gave himself eight out of ten. Some immodesty is justified. Almost overnight after taking office Mr Macri dismantled the populist policies of his predecessor, Cristina Fernández de Kirchner. He eased currency controls; had the national statistics institute stop massaging inflation figures; and resolved a dispute with holders of overdue government debt, restoring Argentina’s access to capital markets.

Argentines have been less generous with praise. Mr Macri promised that by now confidence would be back and healthy growth would ease the pain of his reforms. Instead the economy remains sickly: GDP will shrink by 1.8% in 2016, says the IMF. In October industrial production fell by 8%, year on year; construction collapsed by 19%. One in 12 Argentines is out of work. Inflation may no longer be misreported, but looks stuck at 35%. With incomes crimped, households are spending 7.5% less on basic goods than in 2015, estimates CCR, a consultancy.

Lacking a majority in congress, until recently the president could at least count on disarray among rivals. The dominant Peronist movement once held together by Ms Fernández fractured after her candidate’s defeat by Mr Macri: moderates backed some of his ideas; hardliners refused to. With growth prospects receding, the two camps have put their differences aside. …



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