Updated 06:30 PM EDT, Wed, Oct 27, 2021

Mauricio Macri Fixes Argentina But Budget Deficit Timeline Have Investors Worried

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Argentina President Mauricio Macri has been fixing the ailing economy of his country from his first day in office. In the month since he was inaugurated as president, he was able to overhaul many of the South American nation's problems, including dismantling currency controls and export tarrifs. He was able to turn around the discredited statistics bureau, and even announced plans to resolve the country's dept dispute.

Among his bigger moves so far include wider security aimed at the growing presence of drug cartels and organized crime in Argentina. For example, he has authorized a shoot-down of suspected drug planes that are making their way in and out of the country regularly. According to Insight Crime, the provisions declared a public security emergency throughout the country for a whole year, and is basically a revamp of former President Cristina Kirchner's "Operation Northern Shield" program.

However, when it comes to fixing the budget deficit, Bloomberg Business noted that he's going slowly, but hopefully surely. His strategy to slowly approach the budget deficit has many citizens worried, as well as the analysts and investors who initially saw and lauded his early fix-it plans.

An investment director for the emerging market equities at GAM UK Ltd opposed Macri's decision, saying "I would fast-forward the whole damned lot and do it all in six to nine months -- go for shock therapy. They're missing an opportunity and running a bigger risk."

Macri does admit, however, that the debt talks are going slower than expected. On the topic of his efforts to reach a fair agreement regarding the country's bond debt, he said that "there are no concrete results" since he took office. Yahoo! noted that he spoke at the World Economy Forum in Switzerland, where he said he's been expecting more progress.

Finance Minister Alfonso de Prat-Gay also noted that the next goal of the government is to fight the skyrocketing inflation rates. Argentina is set on lowering the annual inflation to 25 percent in 2016, compared to the massive 30 percent in previous years. This will not be an abrupt adjustment, however, as the government is set on adopting a gradual approach on the subject.

Andres Borenstein, a BTG Pactual analyst in Buenos Aires, noted, "There are two benefits from a more gradual fiscal adjustment: on the one hand you don't affect growth so much and on the other by not cutting subsidies so much prices won't rise as much and therefore your inflation targets are more achievable."

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