Argentina: Emerging Cracks In Public Support For Government, But Policy Continuity Remains Base Case

Introduction

Argentina's government led by Alberto Fernández faces challenges amidst declining public support. Despite this, policy continuity is expected for the time being. This article provides an in-depth analysis of the current political and economic situation in Argentina, exploring the reasons behind the declining public support and assessing the potential impact on government policies.

Declining Public Support: A Growing Concern

Public support for the Fernández government has witnessed a steady decline in recent months. This can be attributed to several factors, including the government's handling of the COVID-19 pandemic, rising inflation, and perceived corruption.

The government's pandemic response has been widely criticized, with many Argentines believing that the government's lockdown measures were too strict and ineffective. The economic fallout from the pandemic has further eroded public confidence, as rising inflation and unemployment have put a strain on household budgets.

Additionally, the government has been embroiled in several corruption scandals, which have damaged its credibility and public trust.

Policy Continuity: Despite Challenges

Despite the challenges posed by the declining public support, policy continuity is expected to remain the base case for the time being. President Fernández has stated his commitment to maintaining the current economic policies, which include fiscal austerity and a gradual reduction of the budget deficit.

The government's focus on fiscal discipline is driven by the need to reduce the country's high levels of debt and inflation. However, these policies have been met with criticism from some economists, who argue that they could lead to a further slowdown in economic growth.

The government has also signaled its intention to continue with its ongoing negotiations with the International Monetary Fund (IMF) to restructure Argentina's foreign debt. A successful agreement with the IMF would help to improve Argentina's access to international capital markets and provide much-needed financial support.

Potential Impact on Government Policies

The declining public support for the government could have a significant impact on its ability to implement its policy agenda. If the government's approval ratings continue to decline, it may become more difficult to pass legislation and maintain support for its policies.

The government may also face pressure to change its policies if the economic situation worsens. Rising inflation and unemployment could lead to social unrest and make it more difficult for the government to maintain its commitment to fiscal discipline.

Conclusion

President Fernández's government faces challenges amidst declining public support. Despite this, policy continuity is expected for the time being. The government's focus on fiscal discipline and its ongoing negotiations with the IMF are likely to remain the cornerstone of its economic policy. However, the declining public support could have a significant impact on the government's ability to implement its agenda and maintain its commitment to its current policies.