The public corruption scandal that broke on August 1 may be a political gift for new President Mauricio Macri, but some are predicting an economic nightmare for the country. More than a dozen former Argentine government officials and business leaders were arrested after La Nacion published an investigation into a decade of alleged corruption under the former government of Cristina Fernandez de Kirchner. Since the investigation broke, the Merval stock index dropped 9.2% in just over a week and many fear that investors will shun the country until the investigation has been completed.
In an article published by Bloomberg, RK&O partner Jeffrey Lehtman comments on the status of the investigation and the projected impact this development could have on Argentina’s already fragile economy. “We are still in the early days of the investigation which means it is difficult to predict the full scope of the scandal,” he said. “But the economy’s reaction thus far does not bode well.”