page_title: Juan Perón
section_title: Growth and limitations
hierarchical_section_title: Juan Perón / First term (1946–1952) / Growth and limitations
caption_attribution_description: Fragata Libertad en reparaciones en el Astillero Rio Santiago.
context_page_description: Juan Domingo Perón was an Argentine Army general and politician. After serving in several government positions, including Minister of Labor and Vice President, he was elected President of Argentina three times, serving from June 1946 to September 1955, when he was overthrown in a coup d'état, and then from October 1973 until his death in July 1974.
  During his first presidential term, Perón was supported by his second wife, Eva Duarte: they were immensely popular among the Argentine working class. Eva died in 1952, and Perón was elected to a second term, serving from 1952 until 1955. During the following period of two military dictatorships, interrupted by two civilian governments, the Peronist party was outlawed and Perón was exiled. When the left-wing Peronist Héctor José Cámpora was elected President in 1973, Perón returned to Argentina and was soon after elected President for a third time. His third wife, María Estela Martínez, known as Isabel Perón, was elected as Vice President on his ticket and succeeded him as President upon his death in 1974.
  Although they are still controversial figures, Juan and Eva Perón are nonetheless considered icons by the Peronists.
context_section_description: Economic success was short-lived. Following a lumbering recovery during 1933 to 1945, from 1946 to 1953 Argentina gained benefits from Perón's five-year plan. The GDP expanded by over a fourth during that brief boom, about as much as it had during the previous decade. Using roughly half the US$1.7 billion in reserves inherited from wartime surpluses for nationalizations, economic development agencies devoted most of the other half to finance both public and private investments; the roughly 70% jump in domestic fixed investment was accounted for mostly by industrial growth in the private sector. All this much-needed activity exposed an intrinsic weakness in the plan: it subsidized growth which, in the short term, led to a wave of imports of the capital goods that local industry could not supply. Whereas the end of World War II had allowed Argentine exports to rise from US$700 million to US$1.6 billion, Perón's changes led to skyrocketing imports (from US$300 million to US$1.6 billion), and erased the surplus by 1948.
  Perón's bid for economic independence was further complicated by a number of inherited external factors. Great Britain owed Argentina over 150 million pounds Sterling (nearly US$650 million) from agricultural exports to that nation during the war. This debt was mostly in the form of Argentine Central Bank reserves which, per the 1933 Roca-Runciman Treaty, were deposited in the Bank of England. The money was useless to the Argentine government, because the treaty allowed Bank of England to hold the funds in trust, something British planners could not compromise on as a result of that country's debts accrued under the Lend-Lease Act.
  The nation's need for U.S. made capital goods increased, though ongoing limits on the Central Bank's availability of hard currency hampered access to them. Argentina's pound Sterling surpluses earned after 1946 (worth over US$200 million) were made convertible to dollars by a treaty negotiated by Central Bank President Miguel Miranda; but after a year, British Prime Minister Clement Attlee suspended the provision. Perón accepted the transfer of over 24,000 km (15,000 mi) of British-owned railways (over half the total in Argentina) in exchange for the debt in March 1948. Due to political disputes between Perón and the U.S. government (as well as to pressure by the U.S. agricultural lobby through the Agricultural Act of 1949), Argentine foreign exchange earnings via its exports to the United States fell, turning a US$100 million surplus with the United States into a US$300 million deficit. The combined pressure practically devoured Argentina's liquid reserves and Miranda issued a temporary restriction on the outflow of dollars to U.S. banks. The nationalization of the Port of Buenos Aires and domestic and foreign-owned private cargo ships, as well as the purchase of others, nearly tripled the national merchant marine to 1.2 million tons' displacement, reducing the need for over US$100 million in shipping fees (then the largest source of Argentina's invisible balance deficit) and leading to the inauguration of the Río Santiago Shipyards at Ensenada (on line to the present day).
  Exports fell sharply, to around US$1.1 billion during the 1949–54 era (a severe 1952 drought trimmed this to US$700 million), due in part to a deterioration in terms of trade of about a third. The Central Bank was forced to devalue the peso at an unprecedented rate: the peso lost about 70% of its value from early 1948 to early 1950, leading to a decline in the imports fueling industrial growth and to recession. Short of central bank reserves, Perón was forced to borrow US$125 million from the U.S. Export-Import Bank to cover a number of private banks' debts to U.S. institutions, without which their insolvency would have become a central bank liability. Austerity and better harvests in 1950 helped finance a recovery in 1951; but inflation, having risen from 13% in 1948 to 31% in 1949, reached 50% in late 1951 before stabilizing, and a second, sharper recession soon followed. Workers' purchasing power, by 1952, h
caption: Repairs at the Río Santiago Shipyards
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