For the last two years, a dark cloud has been over Argentina as they contend with a serious economic crisis. The South American Country, and third largest economy on the continent, has been in a prolonged recession since mid-2018, with the Argentinian Peso losing over 60% of its value, poverty sky-rocketing, unemployment hovering at around 10%, and external debt going through the roof.
Since January 2016, when the economic crisis in Argentina began to emerge, the Peso has decreased in value from 13 Peso to the dollar, to just under 60 as of today’s exchange rate. Whilst this only adds to the crippling economic woes across most of the country, there is a positive side, as there always should be in the eyes of an economist.
source: tradingeconomics.com
When $1 would only buy a mere 13 Peso’s 5 years ago, that same dollar will now get you just under 60! For those outside of Argentina looking to either import Argentinian goods or buy property in the country, now could be the perfect time to buy! However, given that the country is also dealing with high levels of inflation (34% in 2018) importers are likely to be put off by the increasing price of Argentinian goods. Property however, could be a sound investment…
According to a report on the country’s property market, house prices actually fell by 2.5% year-on-year in 2019. For those with a few spare dollars, and willing to help out the Argentinian economy with some much-needed investment, look no further this year: buy a house in Argentina!
THINK LIKE AN ECONOMIST!
Q1. What is meant by the term exchange rate?
Q2. Describe the trend of the Argentine Peso against the US dollar since 2016.
Q3. Analyse the argument for why buying a house in Argentina could be a good decision in 2020.
