In the last decade Argentina has suffered recurring economic problems of inflation, high external debt, capital flight, and budget deficits. Growth in 2000 was a negative 0.5%. Domestic and foreign investors were skeptical of the government's ability to pay debts and also maintain the peso's fixed exchange rate with the US dollar. The economic situation begins to worsen in 2001 because of the wide spreads on Argentine bonds, the banks with draws were outrageous, and consumers and investors were not confident with the economy situation. This happen in the fall of 2001, the economy was a disaster with the debt problems that caused such a major panic. The government also clamped down on capital movements causing Argentina to hurt much more severely. Argentina defaulted on its debt of one hundred and forty one billion dollars to the United States; this caused the peso to depreciate in value. It then forced banks to convert U.S. dollar deposits into cheap pesos, impoverishing millions.
The Government tired to stabilize the economy by achieving a zero deficit to help restore it, but this also did not help the economy in Argentina. Argentina had many more problems so the zero deficits were not efficient enough to pull them out of the economy problems they had. With the peso's peg being abandoned in January 2002, this meant the peso had to float, so in February the peso begin to float. All this actually hurt the economy more making the exchange rate plunged and inflation picked up rapidly, unemployment rate also soared to 21.5%. This all happen very the fast. .
The many factors the contribute to the economy crisis in Argentina were due to The peso being devalue, the investors and consumer withdrawing all their funds, unemployment rate soaring, the exports and imports had an impact, budget rate, poverty contribute to the crisis and production or products.