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The picture from Argentina is Ugly

 (Image source: wsj.com)

Once the envy of Latin American economies, Argentina is increasingly facing tough economic headwinds! Yesterday, Argentina’s currency dropped more than 15 percent against the U.S. dollar. Inflation is currently running in the mid-twenties. In an effort to stop the bleeding, the central bank has devalued the peso. Many economists are now predicting that the economy will slide into recession. In addition, fears are mounting that the country is running out of foreign exchange reserves. Moreover, Argentina’s credit default swaps are approaching worrying levels. The devaluation will definitely make imports more expense and lead to greater social unrest.