The Argentine government has achieved a fiscal surplus in the first two months of its administration, according to recent records. However, this success has come at a cost, with the economy experiencing a sharp decline. The latest Monthly Estimate of Economic Activity (Emae) report by the National Institute of Statistics and Censuses (Indec) reveals that the Argentine economy fell by 4.3% in January 2024 compared to the same month last year, marking a significant contraction.
Only five out of the 16 sectors analyzed showed positive variations in the year-on-year comparison, with Agriculture, mining, Social and Health Services, Education, and Public Administration and Defense experiencing growth. On the other hand, sectors such as Construction, Fishing, Financial Intermediation, and Manufacturing Industry reported significant declines.
The government’s focus on achieving a balanced budget has led to cuts in expenses, impacting economic activity. President Milei remains committed to maintaining this course, emphasizing the importance of controlling inflation. Minister of Economy, Luis Caputo, has warned of a year of economic decline, with possible recovery forecasted for the last quarter of 2024.
Despite these challenges, Milei had already predicted a period of “stagflation” before taking office. While the economy is not yet technically in a recession, the current economic conditions suggest a difficult road ahead for Argentina.