Buenos Aires, Argentina – Gross domestic product (GDP) in Argentina will contract 1.8 percent in 2019, according to the latest estimates from the Organisation for Economic Cooperation and Development (OECD), adding to the headwinds that President Mauricio Macri faces in elections scheduled for October.
The OECD released its latest estimates on Wednesday, just a day after a new poll showed that controversial former president Cristina Fernandez de Kirchner, who officially announced Saturday that she is running as a vice-presidential contender in October, was gaining an edge in public opinion over Macri for the first time. The poll was conducted by the influential Universidad de San Andres in Buenos Aires.
On Wednesday, the OECD forecasted another contraction for 2019, but noted that the economy could expand 2.1 percent in 2020.
On Tuesday, just as the latest poll numbers came out, Fernandez de Kirchner was set to appear in court at the start of the first of 11 trials. The cases focus on multiple allegations of corruption, bribery and coverups. They have done little to dent the popularity of the polarizing former president.
Following weeks of political activism by Fernandez de Kirchner – including the launch of a best-selling book and her announcement of a bid to run in this year’s election – analysts are now seeing the former president make a comeback.
“In terms of positive image, Mauricio Macri stands at 29 percent, [moderate] Roberto Lavagna at 32 percent and Cristina Fernandez de Kirchner at 34 percent. For the first time, she overtook the president,” said Diego Reynoso, director of the Public Opinion Center at Universidad de San Andres.
This figure underscores a recovery trend in many of the former president’s polling numbers, including a significant drop in her disapproval ratings.
“Around 70 percent were sure not to vote for Cristina Fernandez a year ago. Now, she matches Macri’s 55 percent,” Reynoso said.
The poll was conducted between May 6 and 18 and did not factor in opinions after Fernandez de Kirchner’s social media announcement of her intention to run in October.
Economy could impact election
The election will be held at a difficult time for Argentina’s economy. The Argentine peso has lost more than half its value against the United States dollar in the last 12 months. Bond spreads reached triple-digit highs, and later subsided amid concerns of a potential debt default and lower poll numbers for right-of-center president Macri.
Fear of job losses and runaway inflation are the main worries for voters, and “as long as these remain in the top spots, opposition candidates will have the upper hand,” said Reynoso.
Unemployment stood at 9.1 percent in the fourth quarter of 2018, compared to 7.2 percent during the same period in 2017, according to official figures.
The International Monetary Fund (IMF) estimates a 43.7 percent inflation rate for this year.
Whoever wins in October will need to have good relations with all international players, especially the IMF, analysts say.
“Many bilateral negotiations will be sorely needed [in 2020] in a world with increasing trade tensions,” said Ricardo Carciofi, lead economic researcher at CIPPEC, a think tank.
Argentina’s GDP is expected to drop by 1.2 percent in 2019, according to the IMF. To address this in any significant way, the country will need to spur anemic consumption and exports, said Carciofi.
In her announcement Saturday on Facebook, Fernandez de Kirchner said she would leave the top of the ballot to Alberto Fernandez (no relation), the former chief of staff of her late husband, who was the country’s president before her.
Fernandez is known as a moderate and a deal-making apparatchik of the Peronist or Justicialist Party.
“She could win in a first round, and would surely win against the government in a runoff,” Reynoso said in light of the latest data.
Still, the winner at the ballot box may have limited influence over economic policy in a country with few good choices to ensure continued access to debt and new markets for exports.
“There has to be access to international markets, both financial and export,” Carciofi told Al Jazeera.