The United States Federal Reserve recently announced an increase in interest rates, which has generated uncertainty in financial markets of all the world. In Argentina, experts are evaluating how this decision will affect the country’s economy, and they also worry about political and social unrest that are occurring throughout Latin America.
According to analysts, the rise in interest rates can generate capital outflow of emerging markets, including Argentina. In addition, it can increase the interest rate on loans and decrease foreign investment in the country. However, there are also those who believe that the effect will be limited, since the Argentine economy has grown in the past year despite being plagued by inflation of more than 90%.
Besides, Analysts from the International Monetary Fund (IMF) have declared on the situation in Latin America, in which they point out that political and social instability may have a negative impact on GDP growth in the region.
Despite the uncertainty, experts agree that the Argentine economy is more prepared to deal with this type of situation than in the past. However, it is important to continue to monitor the evolution of the markets and take proactive measures if necessary. The Fed’s interest rate hike is a challenge for the Argentine economy, but it is also an opportunity to strengthen long-term financial stability. In addition, addressing political and social unrest is essential to ensure sustainable growth in the future.
About, some of the Argentine bonds have been fluctuatingfor the closing of Friday they have shown negative closings, which may be associated with the rise in interest rates, as well as the political context that Argentina is experiencing, as the international fund analysts have pointed out. It will be difficult for Latin America to be able to increase its GDP while it remains submerged in a constant crisis of riots and political instability, which, close to helping, is driving away investment and therefore strengthening the economies of the region..
In terms of growth, The IMF estimates that Latin America and the Caribbean will grow by 1.8%, which represents the average growth estimated for the rest of the worldbut for this 1.8% to be possible, the governments of the region must make a gigantic effort to maintain political and social peace, so that it helps create the necessary conditions for investments in countries of the region.
In this sense, there are currently political problems in Peru, Brazil is normalizing after an attempted coup as analysts have called it, Colombia has a great political polarization; in Argentina this year there will be electionsConsequently, they are geopolitical elements that generate doubts about the stability of the economies, and therefore, investors doubt whether or not to invest in countries like Argentina, which also, just closed with inflation of more than 90% year-on-year and with inflation close to 6 points for the month of January, according to data from INDEC (National Institute of Statistics and Census).
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