Argentina is experiencing an economic collapse with annual inflation reaching 113%, pushing 40% of the population into poverty, and potentially leading to the return of the far-right under Javier Milei.
The shift to a dollar-based economy in Argentina following Javier Milei's win in the preliminary elections is expected to bring price stability and potential benefits for the pet food industry, including easier importing and increased foreign investment, although short-term economic instability may lead to lower consumer spending.
Argentina should consider pegging its currency to Brazil's real instead of the US dollar, as it would help address economic problems such as exchange-rate instability and hyperinflation, according to an economist.
Brazil's finance minister has proposed using Chinese yuan guarantees to reduce trade risks with Argentina, as the country faces a dollar shortage and its currency, the peso, continues to perform poorly in the global market.
Argentina's government has announced a series of benefits, including financial aid for pensioners, tax relief for self-employed workers, and funding for farmers, in an attempt to ameliorate the effects of the country's severe economic crisis.
Argentina's front-runner presidential candidate, Javier Milei, plans to scrap the peso currency and cut taxes on grains, but advisors state that implementing these proposals would take time and may require the use of executive decrees to bypass congressional hurdles.
Argentina is facing the highest triple-digit inflation in over three decades, potentially reaching near 200% by year-end, which is causing increased poverty, anger among voters, and memories of past economic crises.
Argentina should avoid dollarizing its currency and learn from Ecuador's experience, as it could lead to a prolonged period of economic weakness, according to economist Robin Brooks.
Most Latin American currencies fell as the dollar strengthened on robust U.S. economic data, with the Mexican peso leading the declines, while Chile's peso gained after the central bank cut its benchmark interest rate and lowered its economic growth forecast for 2023.
Argentina's peso currency is at risk of another devaluation after the upcoming presidential election, with estimates suggesting a 16.6% devaluation in the three months following the vote.
Argentina's dollar scarcity should not prevent the country from adopting the dollar as its currency, according to economist Francisco Zalles, who believes that dollars would flow back into Argentina once it makes the switch and that Javier Milei's plan to dollarize would be successful. However, other commentators have warned that adopting the dollar without ample reserves could have catastrophic consequences.
Argentina is facing skyrocketing inflation, with consumer prices soaring by 12.4 percent in August and an annual inflation rate of 124.4 percent, putting the ruling coalition on the defensive ahead of the upcoming presidential race.
Uruguay's central bank is thriving with low inflation, a strong currency, and a pivot towards interest rate easing, while Argentina's economy struggles, highlighting the diverging paths of the two neighboring countries.