WHEN he was unexpectedly elected Argentina’s president in 2015 Mauricio Macri faced a task that was approximately as simple as walking a tightrope across the Iguazú falls while grilling a steak. His predecessor,Cristina Fernández de Kirchner, had bequeathed a manufacture-believe economy. Inflation of 30-40% a year was officially covered up. The peso was wildly overvalued, and exports were taxed and many imports were banned. The government provided energy and transport almost free. The resulting fiscal deficit was financed by the central bank,which printed money to the tune of 5% of GDP. In a country traumatised by past economic shocks, Mr Macri promised to straighten all this out gradually.
He has done a pretty excellent job. The economy has grown at an annual rate of around 3% for the past 18 months, and even while the government has ended most of Ms Fernández’s distortions. It has gradually trimmed the fiscal deficit,partly by raising energy and transport prices. The central bank now only hands over money worth 1% of...
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Source: economist.com