Argentina Explores Dollarization to Curb Inflation, But Experts Skeptical it Can Meet Economic Conditions to Succeed

Argentina's president proposed dollarizing the economy like Panama, Ecuador, and El Salvador have done, but experts say Argentina lacks the economic conditions to successfully dollarize.

Dollarized countries have lower inflation, but Argentina has a higher GDP per capita than them.

Obstacles include Argentina's lack of productivity, business dynamism, lenders, and FX reserves to defend the peg.

Argentina's large population of 46+ million versus <13 million in dollarized countries also poses challenges.

Even if Argentina met objectives like higher savings and reserves, dollarization would still likely fail and lead to de-dollarization.