Angle: World Cup winning Argentina, reality of ‘default crisis’ | Reuters

NEW YORK/BUENOS AIRES ( – Argentines explode with joy after their national team won the World Cup in Qatar. The victory lifted my mood when I was depressed by the economic downturn and inflation.

On December 21st, the people of Argentina are bursting with joy over their national team’s stunning win at the World Cup in Qatar. The victory lifted my mood when I was depressed by the economic downturn and inflation. FILE PHOTO: Crowds gather in Buenos Aires for the triumphal parade on June 20, 2022. REUTERS/Agustin Marcarian

Gregoria Victoria, 86, who lives in Buenos Aires, is one of them. .

But the reality facing the country’s economy remains grim. Inflation is approaching 100%, capital controls are in place and the poverty rate is close to 40%. There is also the possibility of further defaults. “We will soon be brought back to reality and have to deal with the circumstances that are hitting us day and night,” admits Victoria.

Some estimates put between 4 and 5 million people in the triumphant return parade for Lionel Messi’s hard-fought victory, the first World Cup since Diego Maradona’s in 1986. A huge crowd filled the streets and caused great excitement.

As a result, it became difficult for the bus carrying the athletes to proceed, and they had to switch to a helicopter flight midway through the race.

These reverberations of joy soon fade away, and the old days return again. It is a world of raging inflation, with a year-on-year price increase of 92.4% in November, and a high interest rate of 75%.

Problems caused by overprinting, artificially overvalued currency peso and low foreign exchange reserves are becoming acute. Investors fear that Economy Minister Massa, whom President Fernandez tapped as a trump card in August, will not push through enough economic reforms ahead of general elections scheduled for late next year. What the Fernandez administration fears is that it will play poorly and lose the election.

“I strongly feel that Masa is just trying to make a stopgap move and doesn’t want to make any meaningful policy adjustments before next year’s election,” said Ted Mann, senior emerging markets equities analyst at AllianceBernstein. There is,” he pointed out. He quipped, “Argentina under Mr. Masa has become an exceptional can-kicker, better than Messi kicking a soccer ball.”

There are also more optimistic voices from the public.

Osvaldo Hassan, 62, a shopkeeper in Buenos Aires, said: “The World Cup has given us credible expectations and aspirations, which were necessary to rally the collective will of the people and move the economy forward. It could be an important trigger,” he said.

Camila Gotelli, 25, who works in marketing, said that a “historic” World Cup victory would bring in more tourists, create jobs and boost Argentina’s image in the world, boosting the country as a whole. I suspect that

Indeed, according to a study by the University of Surrey in England, Argentina’s World Cup victory boosted exports and could provide some tailwinds for the economy in the coming months.

It may also benefit President Fernandez in the short term. Fernandez has secured $44 billion in new loans from the IMF, but his approval ratings have plummeted due to the impact of the coronavirus pandemic and the economic downturn.

Carlos Zarrate, a 63-year-old craftsman, said, “For a while, it will be an advantage for the government because it diverts the public’s attention (from the government).”

Graham Stock, a senior strategist at BlueBay Asset Management, said he expects next year’s election could turn the economy in a favorable direction, including a change of government. This is because the Fernandez administration’s ruling party suffered a crushing defeat in last year’s midterm elections.

But Maria Belén Pereira, 32, an elementary school teacher, says economic reforms don’t happen overnight, and all citizens need to get involved. “We congratulate the national team because they represent the country, but this is just the dedication of 30 or so people. We all have to work hard to change the economy,” she said. was

(Reporters Rodrigo Campos and Belen Liotti)

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