I might be getting the wrong impression but Argentina seems to be in a perennial or at least often repeated sequence of economic and/or financial crises. Just the latest:

the country is in a deep recession. It has one of the world's highest inflation rates, running at 22% during the first half of the year.

Argentina's economy contracted by 5.8% in the first quarter of 2019, after shrinking 2.5% last year. Three million people have fallen into poverty over the past year. [...]

The country is struggling to stave off its fifth debt default in 30 years.

Also according to the Australian Financial Review (citing World Bank data):

Argentina has spent 33 per cent of the time since 1950 in recession second only to the Democratic Republic of Congo.

Why is that?

2 Answers 2


We could simply focus on the most recent economic crises, which are similar in nature, but I think it may be helpful to take a longer-term historical perspective. Earlier on, Argentina was something of a rising economic power. Quoting from Wikipedia's "Economic History of Argentina":

During the first three decades of the 20th century, Argentina outgrew Canada and Australia in population, total income, and per capita income. By 1913, Argentina was the world's 10th wealthiest state per capita. [...] [U]ntil 1962 the Argentine per capita GDP was higher than that of Austria, Italy, Japan and of its former colonial master, Spain.

The same source points to the key for explaining the decline that followed:

Beginning in the 1930s, however, the Argentine economy deteriorated notably. The single most important factor in this decline has been political instability since 1930, when a military junta took power, ending seven decades of civilian constitutional government. In macroeconomic terms, Argentina was one of the most stable and conservative countries until the Great Depression, after which it turned into one of the most unstable.

In the immediate post-war period, the regime of Juan Perón oversaw a profound transformation in Argentina's economic and political system. This is when the country began to turn from a very open, export-oriented market towards a strategy import substitution, which had a mixed record at best, especially in its aftermath.

The era of import substitution ended in 1976, but at the same time growing government spending, large wage increases and inefficient production created a chronic inflation that rose through the 1980s. The measures enacted during the last dictatorship also contributed to the huge foreign debt by the late 1980s, which became equivalent to three-fourths of the GNP.

At certain key moments, notably including the present crisis, Argentina's most severe problem has been it's ability to over-borrow from foreign investors and its inability to repay. The resulting financial crises have magnified underlying weaknesses to make recessions extremely severe. Here is a typical analysis of what this looked like in 1999-2002:

Argentina’s debt ratios (i.e. national debt vs. GDP) rose for at least two reasons. First, primary fiscal surpluses (government revenues minus expenditures exclusive of interest payments on the debt) were not large enough to cover interest payments and also retire some of the outstanding public debt. [...] Second, export growth (and therefore economic growth) was not sufficiently robust to improve the country’s ability to meet its debt obligations and lower debt/GDP ratios.

However, over more recent decades (and this is especially relevant to the current crisis), the IMF and other transnational financial institutions have also played an important role in making Argentina's problems far worse then they might have otherwise been. This is admitted by a former deputy director of the IMF in a recent piece in the The Guardian.

  • So Social Liberalism
    – user9790
    Oct 15, 2019 at 15:26
  • 5
    Uh, no. For starters, there was nothing liberal (social or otherwise) about the military junta.
    – Brian Z
    Oct 15, 2019 at 22:40

I'm no expert on Argentina specifically, but once any country (or company, or person, for that matter) has defaulted on their debts once, it becomes harder to stay solvent in future. Credit terms(/bond rates) are far poorer, they are less trusted, and so on. It becomes a self fulfilling prophecy.

In the specific case, well, I can't speak to the truth of it, but Argentina has an unenviable reputation for corruption and mismanagement.

  • 3
    This is probably part of the explanation but hardly satisfactory. They're probably not more corrupt than most of Africa or the rest of Latin America, e.g. they don't seem to have much in the way of drug cartels etc. Oct 14, 2019 at 10:16
  • 1
    According to the Corruption Perceptions Index from 2018, Argentinia is actually one of the higher-ranked countries in South America. With a rank of 85, it's ranked slightly above the median of the 180 countries in that index.
    – Schmuddi
    Oct 14, 2019 at 12:33
  • That rank of 85 does however equate to a score of only 40/100. Even if nearby countries are (perceived) worse, that doesn't in any way invalidate the point.
    – Illarion
    Oct 14, 2019 at 12:58
  • 4
    @Illarion it kind of does invalidate the point - the existence of neighbouring countries with similar or worse corruption but without a perpetual economic crisis illustrates that it's not an inevitable consequence of these corruption levels.
    – Peteris
    Oct 14, 2019 at 16:35
  • 1
    @Fizz that same source shows a significant improvement in perceived corruption rank in the last couple of years. It was 100+ until 2016. So the current rank is a recent improvement. tradingeconomics.com/argentina/corruption-rank
    – Illarion
    Oct 15, 2019 at 10:18

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