Argentine president keeps nation on tenterhooks

May 10, 2011

Helen Popper reports today from Buenos Aires, where President Cristina Fernandez is keeping voters and financial markets guessing on whether she will run for a second term. See our special report “Widowhood, Peron nostalgia and Argentine politics.”

President Fernandez’s approval rating is now running at more than 50 percent, about the same level as when she was elected to suceed her late husband, former President Nestor Kirchner.

She has staged a remarkable recovery. At the height of a messy conflict with farmers over soy taxes in 2008, her approval rating sank to 20 percent.

Few Argentine leaders have managed such a dramatic turnaround, but Fernandez has been given a helping hand by the opposition’s disarray, strong demand for the country’s grains exports and for cars from neighboring Brazil as well as an outpouring of public sympathy following Kirchner’s sudden death in October.

Argentines seem to be willing to tolerate inflation estimated privately at about 25 percent just as long as they can keep on spending. With wage rises broadly matching inflation in recent years and unemployment near a 20-year low, government supporters are quick to point out that things could be a lot worse. Many people have painful memories of the devastating crisis that plunged millions into poverty in 2001-02 as well as the hyperinflation of the late 1980s.

That said, inflation looks like being a big election campaign issue and opponents of Fernandez willtry to seize on it to attack her unorthodox policy mix, which shuns monetary and fiscal tightening on the grounds it would cool the economy.

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