While the president Javier Miley celebrate “an excess of economic victories”, the “austerity and deregulation” what “They drive market optimism, they have deepened Argentina’s worst economic crisis in two decades”the prestigious British newspaper warned this Friday, Financial Times.
With Title “Argentine households face a financial crisis while markets applaud Javier Milei“the report from the site specialized in economics and business assured that, while the libertarian highlighted the fiscal surplus of the first quarter of the year as “a feat of historic proportions and global“, “in the streets of Buenos Aires, that success seems remote“.
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“Austerity and deregulation that drive market optimism he deepened, at least in the short term, Argentina’s worst economic crisis in two decades. The economy contracted 3.6% in the first two months of 2024 compared to the same period last year, and consumer spending plummeted“, the text highlighted.
It should be noted that, according to the Retail Sales Index (IVM) from Argentine Confederation of Medium Enterprises (CAME), Consumption plummeted by 22.1% so far in 2024even reaching a historical minimum at an interannual level in January, with a contraction of 28,5%.
Online, the note recalled that the IMF anticipated an economic contraction of 2.8% of the Gross Domestic Product for this year as a result of the recession, a number that rises to 3.5% For economists who are part of the Survey of Market Expectations (REM).
Due to the economic crisis, 3 out of 10 consumers cannot maintain their purchasing habits
Financial Times: Argentina has European prices and salaries below poverty
“It’s a very ugly time”said Rodrigo, a 27-year-old from Moreno, in statements with FT. Ezequiel, a taxi driver from CABA, pointed out, for his part, against the increase in gasoline, which, as revealed by the media “reduced his daily net salary to US$10, less than the price of a bottle of olive oil”. “How is my family supposed to survive with that?“he asked Ciara Nugentauthor of the writing.
In this sense, Times alerted by a spike in annual inflation, which reached 287% in March according to recent data released by INDEC, and maintained: “Food prices have reached levels comparable to those of European capitals in a country that offers a fraction of salaries“.
This takes place in a context, the article highlighted, of “19% decrease in real terms in the salary of the registered worker”falling down “below the poverty line”which “marks a painful contraction of purchasing power”.
“The factories hThey have suspended their employees and cut production due to the drop in demand; Milei’s suspension of 88% of Argentina’s public works projects, a major source of both employment and corruption, has cost up to 50,000 jobs“he repaired Financial Timeswhich stated, in turn, that “thousands of soup kitchens They say they are on the verge of closing after the Government will cut funding“.
In parallel, he observed that “Middle-class Argentines are selling the dollars they traditionally keep ‘Under the mattress’ pesos to face the increasing rates of medical insurance”, which are nothing more than the fees of prepaid medicine companies.
Oil producers warn that Rosario plants will be paralyzed when Deputies discuss changes in Profits
Financial Times: the surplus is more difficult to achieve and the streets begin to gain ground
“Much of the fall that Argentina is experiencing it is a normalization that will eventually allow you to return to growth. The markets practically They do not pay attention to the current crisis. “They are looking to the future,” he said. Nicolas Dujovneformer Minister of Economy under Mauricio Macri, in dialogue with the media.
For its part, Luciano Sigalovresearcher of Eurasia Groupwarned that “the biggest risk for the recovery is that Milei’s still high approval ratings begin to fall and the opposition in the streets and in Congress gains momentum.
This week it took place, in Plaza de Mayo and different parts of the country, a massive march for budget cuts to public universities, which brought together more than 500,000 people. “Analysts said the figure was a warning light on Milei’s austerity drive“, wrote Financial Times.
Meanwhile, sustained fiscal surpluseskeys to market confidence in Milei, “already becoming harder to reach as the recession hits tax revenues”he remarked FT.
“If the government wants to maintain its fiscal results, will have to continue cutting spending, and if the recession continues, that will continue to cut tax revenues“, said Pablo Wahrenanalyst at the Observatory of Economic Situation and Public Policies, in statements with the British media.
Even so, they highlighted that “Many economists say the worst is almost over”. “We believe we will hit bottom (of the recession) this month or next, and the recovery will begin in the second half“, held Dante Sicafounder of the consulting firm ABECEB.
However, according to the site, “the recovery will be driven by both export sectors and agribusiness“since “sectors that depend on domestic consumer spending, which is expected to fall by 6% to 8% this year, they will take longer” in doing it.
News in development…