country in South America
Carlos Menem 1989-1999
5 different guys 1999-2003
Nestor Kirchner May2003-
However, since the late 1980s the country had piled up huge external debts, inflation had reached 200% per month, and output was plummeting. To combat the economic crisis, the government embarked on a path of trade liberalisation, deregulation, and privatisation. In 1991, it implemented radical monetary reforms which pegged the peso to the US dollar and limited the growth in the monetary base by law to the growth in reserves.
Though initially a success, with inflation dropping and a recovering GDP growth, subsequent economic crises in Mexico, Asia, Russia and Brazil contributed to ever worsening conditions from 1999 onward. The government sponsored tax increases and spending cuts to reduce the budget deficit, which had ballooned to 2.5% of GDP in 1999, though both domestic and foreign investors remained skeptical of the government's ability to pay debts and maintain the peso's fixed Exchange Rate with the US dollar.
The economic situation worsened still further in 2001 with the widening of spreads on Argentine bonds, massive withdrawals from the banks, and a further decline in consumer and investor confidence. Government efforts to achieve a "zero deficit", to stabilise the stricken banking system, and to restore economic growth proved inadequate in the face of the mounting economic problems. Newly elected president Eduardo Duhalde met with IMF officials to secure an additional $20 billion loan, but immediate action seemed unlikely. The peso's peg to the dollar was abandoned in January 2002, and the peso was floated from the dollar in February.
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