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FX.co ★ Argentina fails to use football as economy savior

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Forex Humor:::2014-07-24T06:19:00

Argentina fails to use football as economy savior

The World Cup, on which the Argentine authorities put hopes on, failed to help avoid yet another default and gloomy sentiment of citizens.
Despite the fact that several hundreds of football fans eagerly spent their time and money for the World Cup in Brazil, this did not solve the problem of debt crisis and failed to offset economic losses. There is record high inflation in Argentina with prices skyrocketing and the national currency depreciating. The people of Argentina are quite pessimistic. Thus, more than half of respondents expect the continuation of economic deterioration in the nearest future. The country’s government put high hopes on the tournament especially when Argentina eliminated the Netherlands in a penalty shootout as Maxi Rodriguez scored the winning goal, thus making the national team clinch a World Cup finals appearance. “The whole country roared with happiness and streets were filled with cheering fans. Argentina has problems. Argentina has always had problems, but now we can forget it and rejoice”, a football fan said in the central park of Buenos Aires.
However, the things went not as good as expected. The success of the football national team failed to provide the country’s economy with the essential momentum.
Of course, Argentina could declare default. In this case, the consequences of the financial crisis would be not as harsh as in 2002. However, inflation would accelerate and the country would have no access to international debt markets.
Currently, inflation rate is above 30% and Argentina’s economy, which has been backed by significant government spending, is in recession.
The opponents of the governing party accused the authorities of trying to distract people by football. Thus, tariffs for public transport in Buenos Aires have been quietly raised. Now it is common among the Argentinians to say that the government’s action must be closely watched as it tried to conceal things using football as a smokescreen.

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