1998–2002 Argentine great depression
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The 1998–2002 Argentine great depression was an economic depression in Argentina, which began in the third quarter of 1998 and lasted until the second quarter of 2002.[1][2][3][4][5][6] It followed fifteen years of stagnation and a brief period of free-market reforms.[5] The depression, which began after the Russian and Brazilian financial crises,[1] caused widespread unemployment, riots, the fall of the government, a default on the country's foreign debt, the rise of alternative currencies and the end of the peso's fixed exchange rate to the US dollar.[1] The economy shrank by 28 per cent from 1998 to 2002.[2][6] In terms of income, over 50 per cent of Argentines lived below the official poverty line and 25 per cent were indigent (their basic needs were unmet); seven out of ten Argentine children were poor at the depth of the crisis in 2002.[1][6]
1998–2002 Argentine great depression |
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Economy of Argentina |
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By the first half of 2003, GDP growth had returned, surprising economists and the business media,[7][8] and the economy grew by an average of 9% for five years.[9][10] Argentina's GDP exceeded pre-crisis levels by 2005, and Argentine debt restructuring that year resulted in resumed payments on most of its defaulted bonds; a second debt restructuring in 2010 brought the percentage of bonds out of default to 93%, though holdout lawsuits led by vulture funds remained ongoing.[11][12] Bondholders who participated in the restructuring have been paid punctually and have seen the value of their bonds rise.[13][14] Argentina repaid its International Monetary Fund loans in full in 2006,[15] but had a long dispute with the 7% of bond-holders left.[16] In April 2016 Argentina came out of the default when the new government decided to repay the country's debt, paying the full amount to the vulture/hedge funds.[17]