Endless inflation: the Argentine economy plunged into an unprecedented crisis
For several years, the Argentine economy has been plunged into a deep crisis, marked by galloping inflation and a constant devaluation of its currency, the peso. Faced with this disastrous situation, many Argentines are turning to alternative solutions, such as the dollarization of the economy, to break the deadlock.
Javier Milei, an “anarcho-capitalist” candidate, became the emblematic figure of this movement by winning the August primaries with his “Freedom Advances” party. His promise to dollarize Argentina’s economy appealed to many voters desperate over hyperinflation and rising poverty. They see this option as the only possible way out of the economic crisis that has been plaguing the country for several years.
With inflation now reaching 124% per year and a 20% devaluation of the peso last August, the Argentine economy seems to be facing a downward spiral. The emergence of Javier Milei, with his radical economic measures, is therefore not so surprising in this context.
By advocating a “libertarian” capitalism inspired by the United States and proposing radical measures such as the abolition of the Central Bank and eight ministries, Javier Milei was able to attract the attention of public opinion. His flagship proposal, the dollarization of the economy, is the subject of much debate.
However, for many economists, this plan is far from realistic. Dollarization would require a large stock of liquid dollars to replace the national currency. However, Argentina does not have sufficient reserves for this. Additionally, borrowing from international markets is currently difficult for the country.
Despite doubts about the feasibility of dollarization, Javier Milei managed to capture the attention of a population disillusioned by the traditional political class. After the failures of the presidencies of Mauricio Macri and Alberto Fernandez, marked by increasing poverty and successive economic crises, many Argentines see in Milei a real alternative to get out of this impasse.
It is clear that the Argentine economy is facing major challenges and that a miracle solution does not exist. Dollarization may seem attractive, but it raises many questions and uncertainties. It is essential to analyze in depth the consequences of such a measure before adopting it.
Ultimately, Argentina’s economic crisis requires a comprehensive approach, including structural reforms, investment promotion and the fight against corruption. It is important to find lasting and viable solutions to get the country out of this disastrous situation and offer a better future to its citizens.