Indebtedness in Argentina: crisis, structural factors, and long-term determinants (2001- 2021)

Abstract

During the initial years of Kirchnerism, Argentina followed a path of economic growth and strong growth in the labor market, together with an unprecedented process of debt reduction that included two debt swaps and the early cancellation of the debt with the IMF. The deterioration of the economic conditions in the last years of the administration forced the government to try to rebuild the link with the international financial markets, although this was not possible due to the legal conflict with the so-called "vulture funds". The triumph of Juntos por el Cambio at the end of 2015 radically changed this scenario by reestablishing the dominance of neoliberal economic policies, which set in motion a sharp cycle of indebtedness and foreign asset formation. This paper analyzes the trajectory of argentina's external debt between 2001 and 2021 and examines both the relevance of certain structural factors and the long-term effects caused by this type of policies.