ARGENTINA: A Consumer Subsidy Trap

Alison Post and Tomás Bril Mascarenhas study how Argentina's subsidies for energy and transportation are constraining policy moving forward.

Argentina’s economy is in trouble. The Argentine peso saw a 90-percent devaluation from April 2018 to September 2018. Inflation rates are projected to be 30 to 40 percent in 2018 and what was seen as a potential growth year is now forecast to see a 1-percent contraction of its GDP. The country’s economy is at its most fragile since the 2001-2002 economic crisis, and many Argentineans face the possibility of poverty as the country tries to find a way out of its economic woes.