Foreign investors are dumping Argentinian bonds and stocks as pre-election opinion polls continue to predict defeat for the country’s pro-business President Mauricio Macri.
The MSCI Argentina Index is down 4.3% this year, after falling 52% last year following a currency crisis. The president, who helped his country shake off its image as a pariah in the global financial market, is struggling to convince voters to reelect him.
With inflation hovering at 51%, Macri’s approval rating is declining with every passing day, to the extent that some pundits are calling him ‘Macrisis’, painting him as a weak president.
In a recent poll conducted by Synopsis, respondents listed inflation and unemployment as major problems in the beleaguered South American country.
There is also growing concern that Argentina may default on its debt payments. Last year, the International Monetary Fund (IMF) offered the country a US$56 billion lifeline to Argentina in one of the biggest loan packages ever approved by the global financial organization.
With his election outlook deteriorating, Macri appears to have turned to socialist measures to win the hearts and minds of the people.
He recently introduced price controls on more than 60 products, conceding the fact that people are losing purchasing power in the face of soaring inflation. But the measure is likely to discourage manufacturers, putting the jobs of many blue-collar workers at risk.
But the markets, and some of the population, are also worried about a possible victory by former president Cristina Kirchner, who some see as responsible for pushing the country into the economic mess that it is in today.