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Since taking office in December 2015, President Mauricio Macri has taken a number of steps to eliminate protectionist practices that have undermined Argentina’s growth potential for years. Immediately after taking office, the government scrapped currency controls and allowed the peso to freely float. Although this has weakened the peso considerably, in the long run, it will help curb growth of the currency black market and control the decline in foreign exchange reserves. The country’s steep taxes on its major agricultural and industrial export s were slashed, helping boost exports. The government was successful in settling down a debt battle with its creditors, which helped end the country’s 15.0 years of seclusion from global capital markets, allowing the government to issue US$16.5 billion (Argentina’s highest debt release) worth of bonds in international markets in April 2016, which was used to pay creditors and strengthen reserves. Measures to improve the budget deficit have also been undertaken via cuts in electricity subsidies. All of the above measures will bring about major advancements in Argentina’s economic profile; thereby boosting investment and output levels in the country.
Source: Euromonitor International from national statistics/OECD/UN/IMF
Notes: Data for 2017 is forecast