<\/p>\n<\/p>\n
BUENOS AIRES \u2014 For ordinary Argentines, it has been a shocking return to the bad old days, a deja vu of shortages, job losses and bailouts that many thought the country had finally ended.<\/p>\n
Facing a national election a year away, the ever-upbeat President Mauricio Macri never tires of reassuring Argentines that they are on \u201cthe right path\u201d out of a \u201cstorm.\u201d<\/p>\n
But to local economists, even those friendly to the conservative Mr. Macri\u2019s pro-business bent, his imagery doesn\u2019t quite capture the state of an economy predicted to shrink by 2.4 percent this year and had to be propped up just last week by an expanded $57 billion line of credit from the International Monetary Fund. Having emerged from one of the world\u2019s worst currency implosions of the new century, consumers are suddenly confronting a reprise.<\/p>\n
Things aren\u2019t nearly as dire as the post-2001 years, and a more apt metaphor, former National Bank board member Facundo Martinez Maino said, might be that of a car-wreck victim hospitalized after a head-on collision.<\/p>\n
\u201cRight now, staying alive is all that matters,\u201d said Mr. Martinez Maino, now the chief economist at a prominent local consulting firm. \u201cYou\u2019re in a totally sterile room, under controlled temperature, and you can\u2019t venture out or eat [without] a feeding tube.\u201d<\/p>\n
It\u2019s a grim picture reflected by key indicators \u2014 Argentina\u2019s inflation rate is now topped around the world only by those of Venezuela, Sudan and South Sudan \u2014 and painful even for the urban middle class, a key component of Mr. Macri\u2019s political base.<\/p>\n
\u201cThe situation is critical, unfortunately,\u201d Graciela Clouet, a 66-year-old lawyer, said last week as she shopped for groceries in an upscale Buenos Aires neighborhood. \u201cYou don\u2019t know where we\u2019re headed, and you worry.\u201d<\/p>\n
Prices are constantly being hiked, Ms. Clouet said, while the decline of the peso, which has already lost more than half its value this year, is having ripple effects on the rising cost of gasoline and consumer goods across the board.<\/p>\n
But what bothers her the most, she said, is the sense of uncertainty, which Mr. Macri\u2019s repeatedly unkept promises that \u201cthe worst is over\u201d have done little to ease.<\/p>\n
\u201cI want there to be a direction \u2026 for us to go toward someplace,\u201d Ms. Clouet said. \u201cI feel like we\u2019re improvising.\u201d<\/p>\n
For market movers and shakers, the chaotic state of the economy has long contrasted with the president\u2019s near-dogmatic confidence and, worse, conjured up memories of those crises past \u2014 including Argentina\u2019s cataclysmic 2001 default and social meltdown.<\/p>\n
\u201cWe have gotten to a situation that, as a snapshot, is one of the worst since 2001 in terms of devaluation, inflation, recession and economic perspectives,\u201d Mr. Martinez Maino said. \u201cWe\u2019re in one of the worst situations since that collapse.\u201d<\/p>\n
He added, though, that the two scenarios are vastly different in causes and scope.<\/p>\n
Fears of a rerun<\/strong><\/p>\n Even the sense that the country may be headed down a similar road is precisely what Mr. Macri \u2014 and anybody else interested in stabilizing the economy \u2014 is desperately hoping to avoid, said Mariano de Vedia, a political analyst for the La Nacion daily.<\/p>\n \u201cThere\u2019s an old saying here in Argentina: \u2018He who burns himself with milk sees a cow and cries \u2026,\u2019\u201d Mr. de Vedia said. \u201cAlready, salaries are worth less and less, layoffs are beginning to happen and the dollar heads to the skies.\u201d<\/p>\n For Argentina\u2019s lower and middle classes, meanwhile, keeping up with ever-increasing food, utility and transportation costs is becoming increasingly difficult, economic analyst Jose Luis Espert said.<\/p>\n \u201cThis year, with an inflation between 40 and 50 percent and salaries that rise between 25 and 30 percent, the real-wage drop is 15 percent,\u201d Mr. Espert said. \u201cCompanies are closing, stores are closing, and there is a very, very violent drop in consumption.\u201d<\/p>\n For Roberto Rodriguez, who co-owns a florist shop on a lively Buenos Aires street corner, that means business has been \u201ctotally paralyzed.\u201d<\/p>\n \u201cYou notice it in the stores around,\u201d he said. \u201c[This is] a spot with pretty good purchasing power, and even so, we\u2019re feeling it.\u201d<\/p>\n Mr. Rodriguez said he still plans to back Mr. Macri if he runs for re-election next year, hinting that he favors the president\u2019s \u201cchange\u201d agenda over the often inflexible protectionism of his predecessor, leftist Cristina Fernandez.<\/p>\n Although Ms. Fernandez may have handed over a bloated government whose coffers had been emptied by populist spending and corruption, most commentators agree that, three years into his term, Mr. Macri shares a large chunk of the blame for the country\u2019s predicament.<\/p>\n By hastily eliminating currency controls, insisting on unrealistic inflation goals and taking on debt in an undisciplined and unsavvy manner, Mr. Macri committed key errors from the get-go, Mr. Martinez Maino said.<\/p>\n \u201cToday, we\u2019re faced more with macroeconomic problems generated by this administration than with inherited problems, which we\u2019re also faced with,\u201d he said. \u201cAll three elements failed: diagnosis, policies and management.\u201d<\/p>\n To Mr. Espert, the president\u2019s latest attempt to turn things around with a dual commitment to a no-deficit budget and steady money supply thanks to the expanded IMF credit line likely comes a day late and a peso short.<\/p>\n \u201cIf \u2018zero deficit\u2019 and \u2018zero issuance\u2019 had been announced [in 2015], rejecting [Ms. Fernandez\u2019s] inheritance, it would have been one thing,\u201d he said. \u201cToday, almost three years later \u2026 and a year before the elections, it lacks credibility.\u201d<\/p>\n If Mr. Macri really wants to turn things around, Mr. Espert said, his focus will need to be less about political calculus a year before Argentines head to the polls.<\/p>\n \u201cThis administration should forget about the elections [and] take some risks today to get the economy moving by doing some bold things,\u201d he said. \u201cFor example, go see [President] Trump and propose a free trade agreement.\u201d<\/p>\n Ironically, the troubling economy may have boxed in the ruling Cambiemos coalition, even though Mr. Macri has yet to formally announce that he will be seeking a second term, Mr. de Vedia said.<\/p>\n \u201cThe situation is forcing them to ratify the president\u2019s re-election [bid],\u201d he said, \u201cbecause, otherwise, it\u2019s a recognition of his failure.\u201d<\/p>\n If a showdown next year between Mr. Macri and Ms. Fernandez takes place in the midst of a recession, the political analysts mused, then the outcome would be unpredictable.<\/p>\n \u201cPeople could easily say \u2018no\u2019 to the administration and also say \u2018no\u2019 to Cristina,\u201d Mr. de Vedia said. \u201cIt\u2019s not necessarily one or the other.\u201d<\/p><\/p>\n","protected":false},"excerpt":{"rendered":" Having emerged from one of the world’s worst currency implosions of the new century, Argentine consumers are suddenly confronting a reprise. BUENOS AIRES \u2014 For ordinary Argentines, it has been a shocking return to the bad old days, a deja vu of shortages, job losses and bailouts that many thought the country had finally ended. 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