Argentina is on the verge of another economic crisisas rampant inflation and foreign exchange reserve deficits cause nervousness in their financial markets.
President Alberto Fernández appointed economist and government official Silvina Batakis on Sunday to replace Martín Guzmán, whose handling of the economy had come under increasing scrutiny.
(You may be interested in: Argentina: who is the new Minister of Economy and what challenges does she have?)
But JPMorgan economist Diego Pereira said Guzman’s resignation on Saturday “opened a new regime of financial and macroeconomic uncertainty.”
“The market was already very fragile and now it’s going to be terrified,” said Riccardo Grassi, head of risk management at the Mangart investment fund, which was involved in the Guzman-led debt restructuring in 2020.
“If they don’t review the (economic) model, it will implode,” he added.
And it is that the problems of Argentina they mean your currency is now trading at a discount of almost 50% on the black market and its bonds are worth about half what they were worth after the country’s 2020 debt restructuring of more than $100 billion.
(You can read: The strange case of a boy who disappeared 25 years ago ‘without a trace’)
They have been trading at deeply discounted levels of between 20 and 25 cents on the dollar in recent weeks, but most bondholders are now clinging to the hope that a change in government next year could change the approach of the country.
On Monday, The Argentine peso quoted in an influential marginal market (‘blue’) depreciated a strong 14.64%, to the historical floor of 280 units per dollar in the midst of a huge disparity due to the doubts generated by the immediate future of the domestic economy.
This is how Argentines live it
After the devaluation at the end of 2019 and the change of government, the covid-19 pandemic arrived, and now that the epidemiological situation was beginning to improve, Guzmán’s resignation once again it wrecked not only the political-economic panorama of Argentina but also the emotional and psychological stability of Argentines.
Specialists pointed out that the greatest blow occurs in the psychological stability of citizens: anguish, anxiety, difficulty in projecting a future and resignation are some of the greatest blows for those who live through economic crises.
“Recurring economic crises are events that often take on traumatic dimensions. A problem that is created in the collective subjectivity of Argentines is that of a theory of the inevitability of destiny. Namely, It is believed that we have an inevitable and congenital destiny, which is to live in crisis, as if there was nothing to deal with it.”, explained José Eduardo Abadi, a psychiatrist and psychoanalyst.
(Also read: No more all: Buenos Aires prohibits the use of inclusive language in schools)
It is believed that we have an inevitable and congenital destiny, which is to live in crisis, as if there was nothing to deal with it.
According to the expert, this thought generates a feeling of chronic discomfort, anxiety and pessimism that sometimes leads to sadness or depression in Argentines in the face of the crisis.
And furthermore, a fragility of interpersonal bonds and bonds is created that damages a community project. In other words, not only personal stability is undermined but also group stability.
For his part, Miguel Espeche, a psychologist, said that the most common problems related to recurrent economic crises are the difficulty in projecting and the anxiety generated by not knowing what the rules of the game are and the arbitrariness with which those rules can be modified. . Something that is lived today in the Argentine people.
“Human beings have always known that nature is quite arbitrary, but when this is repeatedly transferred to the rules of the human game, it generates a peculiar anxiety and a feeling of instability that greatly affects people. Not to mention the anguish of those who have some pathology and require assistance, but cannot access it or the perception that one cannot help those who need it because they come with themselves on all fours. A very traumatic psychic discomfort is generated for everyone, ”he detailed.
(More news: Lithium: the challenges of the new ‘gold rush’ in Latin America)
José Sahovaler, psychoanalyst member of APA and author of the book La erotica del dinero, maintained that in the Argentina thinks a lot about money and how to make ends meet, so it is very difficult not to comment on what is happening in politics or in the economy.
“If you can’t eat, your stomach hurts and then you can’t think about other things. Economic distress hides and plugs up other types of distress,” she said.
Espeche also commented that economic concerns creep into psychological consultations as an element that influences other circumstances.
“It is seen, for example, in the anguish of parents when they see that their children cannot progress. Not to mention when it directly affects them with difficulties in taking charge of economic obligations or changes in their lifestyle. Crises impact people differently according to each one’s lifestyle. The anguish is transversal to all Argentines”, he said.
(Also: El Salvador: 50 years in prison for a woman who lost a baby in a medical emergency)
In addition, he said that as a consequence of the permanent crises, many young people believe that there are only two options: either they assume that life always has to be like this, like living in a quagmire, or, those who have possibilities, think about how to leave.
But the panorama is full of contrasts. Despite the psychological blow of the crisis, the uncertainty led several members of the middle class to buy goods such as appliances and technology in recent days.
“The experience of previous crises has engraved in the collective unconscious that buying goods or dollars is a better alternative than keeping pesos, which lose value day by day, even in bank deposits,” says the newspaper El País in an article.
The country’s economic challenges
The truth is that the economist Silvina Batakis, who took office as the new Minister of Economy, receives an Argentina full of uncertainties: with one of the highest inflation rates in the world and tough goals to meet within the framework of an agreement with the International Monetary Fund.
Batakis must define with which instruments he will face the fiscal deficit, the shortage of foreign exchange and the rise in prices.
“The first question that the new minister will have to answer is whether the agreement with the International Monetary Fund is still in force,” said Víctor Beker, director of the Center for the Study of the New Economy at the University of Belgrano.
(You can see: Chile: Boric presents his tax reform, what taxes does he contemplate?)
“The unknown is whether there will be a rethinking of goals or whether Argentina is heading for a break with the International Monetary Fund,” Beker said.
Also, Argentina has one of the highest inflation rates in the world, with 60.7% for the period May 2021-May 2022, and there are fears that the price rise will accelerate even more.
The government of President Alberto Fernández has insisted that the phenomenon is multicausal, and highlights that it currently occurs throughout the world. But Batakis will have to determine what kind of measures to prioritize.
REUTERS, AFP and the nation / Argentina (GDA)
American Newspapers Group
More news
Johnson rules out snap election despite mass resignations
Russia: new prison sentences for opposing the invasion of Ukraine
Man ends up in hospital after overdosing on vitamin D
#Argentina #citizens #experience #peso #crisis