Macri will face stiff challenges in Argentina
A weak economic outlook and a strong opposition representation will complicate policy-making
Source: Government estimates, Congress inflation index, UN Economic Commission for Latin America and the Caribbean, IMF
Outlook
Despite some international applause for new President Mauricio Macri's efforts to roll back the policy choices of the 2003-15 Kirchner governments, domestic opinion is broadly sceptical and short-term expectations poor.
Macri's tendency to opt for decrees thus far - an approach adopted by his predecessor, who was much criticised for it - is likely to stiffen opposition, especially in provinces where his government, characterised as pro-finance and pro-business, is not seen as representative of views outside the capital.
The dominant Peronist party is in some disarray and in search of new leadership, leaving an opening for Macri to reach accords with at least some factions. However, the party will regroup quickly; governing without at least some Peronist backing is likely to prove near impossible.
Impacts
- A recession is likely this year and growth thereafter will remain muted.
- The continuing economic malaise in Brazil will also be a drag on manufacturing recovery.
- The political panorama is currently fluid but is likely to solidify in opposition to Macri.