ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Argentina is facing some of the world’s highest inflation, with rates that have topped 70%. The government is on its third economy minister since July and President Alberto Fernandez’s leftist coalition looks permanently split.

Detailed explanation-2: -Argentina posted its highest annual inflation rate in three decades in 2022 as a political crisis exacerbated price hikes driven by the government’s lack of a credible economic plan. Consumer prices rose 94.8% in December from the same month a year earlier, according to government data published Thursday.

Detailed explanation-3: -Argentina’s longstanding practice of having the central bank print money to finance public spending is the main driver of inflation. More money chasing the same amount of goods bids up prices.

Detailed explanation-4: -Argentina was plunged into a devastating economic crisis in December 2001/January 2002, when a partial deposit freeze, a partial default on public debt, and an abandonment of the fixed exchange rate led to a collapse in output, high levels of unemployment, and political and social turmoil.

Detailed explanation-5: -Beginning in the 1930s, the Argentine economy deteriorated notably. The single most important factor in this decline has been political instability since 1930 when a military junta took power, ending seven decades of civilian constitutional government.