Argentine President Mauricio Macri closed the third G20 summit held in Buenos Aires by telling the 55 delegates from member countries that the economic "storm" that his country is experiencing is passing and promised that everything will improve next year.
"Although the growth rate this year hasn’t increased as we had hoped, I am sure we will accelerate the pace of growth next year," said the head of state at the Buenos Aires Convention and Exhibition Center (CEC).
The Macri administration had projected to expand the economy by 3 percent this year but now expects a one percent growth rate. Experts tell Bloomberg they expect a recession for South America’s second-largest economy. "It’s almost certain that Argentina will fall into recession," Fausto Spotorno, chief economist at consultancy Orlando J. Ferreres & Asociados told Bloomberg in June.
The president told the economic ministers and central bank leaders in attendance, "some weeks ago we had to deal with some turbulence due to external volatilities and some internal factors, but we managed to navigate these troubled waters and maintain the course," referring to the US$50 billion loan that the Macri administration and Central Bank recently negotiated with the IMF.
The Argentine government solidified the loan in June after the peso began to rapidly devalue in late April. The government made a last-ditch effort to woo back international investors scared of the country’s soaring inflation rate, which sits at around 28 percent, and falling peso - down by 30 percent since January - by hiking interest rates to 40 percent and selling off monetary reserves.
Macri’s first plan failed, and so instead decided on the IMF loan, as well as billions in loans from the Inter-American Development Bank, the World Bank and the Latin American Development Bank. In exchange, the government has pledged to reduce its national deficit to 1.3 percent of the GDP by 2019.
The president said during his closing remarks at the summit: "The international community has given us strong support, which reinforces our conviction to continue on this ambitious path that focuses on reducing poverty, generating prosperity and deepening our global integration."
Macri has enacted massive government austerity and privatization measures since taking office in 2015 in an effort to shrink state spending. Over the past two years thousands of public workers been let go, and another six thousand will lose their jobs in January 2019 following a recent presidential decree. More than 73,800 private sector jobs have been lost since Macri took office, mainly in manufacturing.
While the administration has managed to decrease poverty by 2-3 percent according to some economists, yet the current rate sits at 29 percent, and nearly half of all Argentine children live in poverty. Energy subsidies have been slashed by over 1,000 percent in some areas of the country since November alone.
Argentina’s economy also took a major hit this year as the world’s biggest exporter of soy meal and soy oil began importing the bean from the U.S. after major rains then droughts cut its own domestic production to 40 million tons, the lowest in nearly a decade.
"Argentines have understood that the change does not occur magically, from one day to the next," said the president who arrived at the last day of meetings under heavy security protection as thousands of citizens protested the IMF loan and the financial summit in the streets of Buenos Aires.
Macri said that "The G20 is much more than a declaration of leaders. It is a gradual process and pluralistic dialogue and global negotiation."