On the night of August 11th, 2019, people came out to celebrate in Buenos Aires, Argentina’s capital, and in other urban centers in the country. Alberto Fernandez and Cristina Fernandez de Kirchner had won the national primary elections, and Peronism, now under the Frente de Todos coalition, was coming back to power after the four-year hiatus of Mauricio Macri’s right-wing neoliberal failure. Expectations were high for a coalitional government that combined each of the extremes: left-wing social movements and the more conservative and traditional political apparatus of the Peronist party.

However, if expectations were high, the challenge was equally complex. Macri’s government could not solve Argentina’s chronic inflation problem and was unable to deliver sustained economic growth. On top of that, the comeback of the IMF left Argentina on the verge of a cliff thanks to the biggest loan in the history of the multilateral institution. And only a few months after the new government took office, the COVID-19 pandemic started and halted the world for the next year, with devastating effects.

Amid this ponderous burden and the unexpected external shock, the government combined successes and failures. On the one hand, it dealt reasonably well with the pandemic, securing not only prevention mechanisms but also an early arrival of vaccines for a non-producer country—the number of deaths relative to those in neighboring countries proves this. The government poured money into welfare protection and resources into business in order to protect employment. On the other hand, the government was rather clumsy—the president was caught celebrating his wife’s birthday in the middle of the lockdown, and the minister for health had to resign after discretionarily allocating a few vaccines among friends.

Besides the pandemic, in 2020 and 2021 the government managed to land decent agreements with both private bondholders and the IMF to restructure Argentina’s foreign debt. This was combined with new attempts to develop economic activities, such as mining and natural resource extraction, that could help to alleviate the country’s lack of dollars and sustain the exchange rate through exports.

After the pandemic’s effects became milder, the economy reopened, and recovery was fast. However, so did inflation, posing an obstacle to wage increases. In other words, recovery was fast—but not fast enough. Poverty levels went down, but remained high overall. Even for families with two incomes, spending on basic goods is still a challenge, not to mention those unemployed or working under informal conditions.

As could be expected, this created tensions inside the ruling coalition. The heterogeneity inside Frente de Todos now turned into an open battle between those who want to keep fiscal order to avoid what they consider a regressive increase in inflation, and those who wish to spend more public money with the goal of accelerating economic recovery and keeping a door open for the 2023 presidential election. And this is not just a minor confrontation: the two main contenders are the current president, Alberto Fernandez, and his vice president and two-time former president, Cristina Fernandez de Kirchner. The former stands on the side of macroeconomic prudence, while the latter is worried about a comeback of macrismo in the upcoming elections.

What will happen is still to be seen, although the forecast for next year looks dark and cloudy. But in any case, the itinerary of the Argentine government tells a story that the new wave of left-wing governments in Latin America should consider carefully. What is the best way to deal with stagnation, inflation, and the international rise of interest rates in a local context of high expectations and public demands? And, moreover, how is it possible to do so by keeping a coalitional government in order, knowing that increasing internal conflict could make the whole enterprise collapse?