Argentina Stocks and Bonds 'Briefly' Surge Amid Economic Collapse... World Cup Victory Effect

S&P Merbal Index Rises 1.83%
Uncertainty Remains Over Inflation Continuation

The Argentine financial market also benefited from the World Cup victory.

According to Reuters, on the 19th (local time), the S&P Merval stock index rose 1.83% to 168,128.28 points. Recently, over-the-counter bonds, which have been struggling due to debt issues, increased by an average of 0.2%.

Argentina's third World Cup win is interpreted as having influenced investor sentiment.

On the 19th (local time), Argentine soccer fans in the capital Buenos Aires celebrated their national soccer team's victory in the 2022 Qatar World Cup while waiting for their return. Upon news that the team would hold the championship trophy and conduct a car parade starting at noon after their return, many soccer fans began an overnight vigil at the Obelisk located in the center of Buenos Aires.

UK Researchers: "World Cup Victory Positively Impacts National GDP Growth Rate"

Research on the impact of sports events on national economies has already been conducted.

A research team from the University of Surrey in the UK stated in a paper published this year that "the GDP growth rate of a country that wins the World Cup increases by at least 0.25 percentage points for two quarters."

They explained that after winning major sports events, the global market's appeal for that country's products and services increases, leading to export growth.

Worst Inflation and Peso Plunge... Economic Outlook Remains Uncertain

However, how long the World Cup effect will last remains uncertain.

According to Bloomberg, Argentina's inflation rate, which started this year in the 50% range, is expected to exceed 100%.

The Latin American Economic Research Foundation (FIEL) predicted Argentina's annual inflation rate to be 112.5% by the end of the year.

As soaring inflation reduces citizens' purchasing power, the poverty rate has also surpassed 43%. In major cities, the number of homeless people and those making a living by collecting trash has sharply increased over the past few years. Instead of going to markets, citizens often bring used goods to the streets for barter, and black markets are forming in various places.

The value of the Argentine currency, the peso, continues to plunge. As of the 16th, it was trading at 172.2 pesos per dollar, nearly a 70% drop compared to the previous year, but the actual market exchange rate used is reported to fluctuate above 300 pesos per dollar.

Argentina Declares Public Holiday on Football Team’s Return Day

Meanwhile, Argentina defeated France in the final of the 2022 Qatar World Cup held on the 18th and received the highest-ever prize money in World Cup history of $42 million (approximately 54.7 billion KRW).

The Argentine government designated the 20th (local time), the day the national team returns, as a public holiday through an emergency presidential decree to commemorate the first victory in 36 years.

This content was produced with the assistance of AI translation services.