Winning the 2022 World Cup won't improve Argentina's economy - Bloomberg

25 December 2022, 04:30 | Peace
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Argentina's dramatic victory at the World Cup last weekend not only brought the country a long-awaited third league title, but also a period of rare national euphoria and a sense of unity, Bloomberg writes..

But can euphoria turn into positive expectations for a crisis-prone economy

Experts agree that such mood swings tend not to have a significant impact on aggregate indicators. Even in a country where football is perceived as a religion.

The impact of winning the 2022 World Cup is likely to be limited to an additional 0.25 percentage points of economic growth in the two quarters after the tournament.

Officials in Buenos Aires agree that the triumph is likely to give only a modest boost to growth, thanks to higher consumption.

The indicators, which are independent of football euphoria, are very contradictory..

The country's economy is expected to grow by more than 5% this year, November's inflation data was the lowest since February, and the International Monetary Fund's board of directors just approved the latest revision of the country's $44 billion loan program.. And this is not bad before the upcoming presidential elections in October..

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But looking from the other side, Argentina's macroeconomic system remains fragile: annual inflation is close to 100%, interest rates are 75%, the country is denied access to international credit markets, and multiple exchange rates complicate day-to-day operations..



In addition, a slowdown in growth expected next year will exacerbate economic hardship, as poverty will engulf about 40% of the population.

Add to that the difficult political environment leading up to the upcoming election campaign, exacerbated by the convict of Vice President Cristina Fernandez de Kirchner on fraud charges, and you have a recipe for even more instability..

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As always in Argentina, these political changes can happen as quickly as Lionel Messi's dribbling.




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