If the measure is the INDEC manufacturing production index, the conclusion suggests that 2023 was the worst year for the domestic industry in almost a decade. And if you prefer to see the same thing another way, we have that only one month in 2019 and three in 2020 recorded records lower than the average decline of 12.8% in December 2023, that is, four very modest months above 96. that have passed since 2016 and a resounding triumph of the recession.
December 2023, i.e. the closing of the last Kirchnerist cycle, brought to the end a conglomerate of industrial activities in the red, largely with figures below zero or well below zero compared to December 2022. Among these, 50.7% in agricultural machinery; 32.6% of the steel industry; 31.9% in electrical equipment and appliances and 25.4% in common metals.
Nor the in many senses advanced production of Food and beverages of Argentina was saved from the shock. Driven by the 11.7% decline for beef and the 23.3% decline for oilseed milling, The result is down 7.8% and seven consecutive months of decline within a complete picture that reveals levels similar to those of October 2020, in the midst of the pandemic.
There is nothing behind such data that is not perceived or could be considered off-script. According to INDEC explanations it is a cross of difficulty in accessing imported inputs, i.e. endless supplies and scarce dollars and, then, problems with payments to suppliers and obviously a decline in domestic demand.
The point is that we are talking about none other than a Industrial decline has been consolidated for some time in Argentinawhich is equivalent to continuing to miss the train of development and progress and continuing to live with low-quality, unstable and unproductive jobs and with increasingly deteriorating wages.
A strong fact of the problem: informal employment, without manpower or social coverage and without the support of joint negotiations, already reaches around 47% of existing employment throughout the country, as much as white work.
Another of the same type, taken from UIA reports, states that, between October 2013 and October 2023, as many as 68,573 formal, vacant and legal jobs were lost in the sector, compared to the 300,000 million that had reached peak activity.
And which sectors have suffered and are still suffering from looting?: first and foremost textiles, leather and footwear, followed by cars and tires and then chemicals and petrochemicals. Among the most affected regions, the city of Buenos Aires is in first place; Behind them are the suburbs of Buenos Aires, Mendoza and San Luis.
And how does the film continue? In the short term there is no chapter on the industrial horizon to be enthusiastic about, according to the latest survey conducted by INDEC among entrepreneurs in the sector.
As regards domestic demand, 49.4% responded that it will decrease and 37.4% that it will not change, that is, that they will continue to be depressed. As for exports, 23.8% will decrease and almost 60% will remain unchanged. Entirely predictable, 82.3% of employers do not plan to hire staff and 67% exclude an increase in working hours.
Just so that pessimism doesn’t subside, now the construction statistics. In fact, they present identical or almost identical data to those of industrial production: a drop of 12.2% in December 2023, the largest since May 2020, in the midst of the pandemic, and 9 drops in the 12 months of last year.
There are no differences with the sector even when it comes to short-term corporate expectations.
93.9% of those who dedicate themselves to private work believe that the activity will continue downhill or on the same line as what has been done so far. Among those in public works the count is equal to 97.2%. And the projections for employment and hours worked are along the same lines and highlight a general coincidence: there is nothing in sight that sounds like a bet on reactivation.
There are answers that focus on general uncertainty, on fiscal pressure, on the delay in payments by the State and, indeed, on the lack of an anti-inflationary policy that appears effective from a concrete point of view.
It becomes clear, therefore, what has been very clear for some time: that the Government will have to deal with an economy full of problems that were not of its own making, this is what it has to face and for which it should have been equipped.
The Monetary Fund has already set a decline of 2.8% for this year, after the 1.1% of the same mark that it would have recorded in 2023. According to the latest survey that the Central Bank carried out with specialists here and abroad, GDP would drop by 3% and would be concentrated almost entirely in the first quarter.
In case it was necessary to clarify, the numbers go on and on. Of course, some are a little scared due to their size.
This is the case of retail sales surveyed by CAME, an organization that represents small and medium-sized businesses throughout the national territory. January data compared to January last year shows an average drop of 28.5%; They continue with 31.3% in electrical and building materials, with 37.1% in food and beverages and jump to 45.8% in pharmaceutical products, i.e. none other than medicines.
Returning to inflation and the Central Bank survey, we know that only in July will the price index return to the single-digit zone: 8%, says the BCRA report. The January figure is still hot (21.9%) and that of the entire year is even hotter: 227%, or almost 16 percentage points above the 211.4% of 2023.
The picture speaks of stagnation with large-scale inflation, also known as stagflation, which puts noise where there is excess noise, spreads uncertainty and affects the most vulnerable social sectors. This also raises an inevitable question: if all this was already in sight, why didn’t Javier Milei come with a team and an armed plan that would attack stagnation and inflation from the beginning?
It’s hard to find something like this Luis Caputo’s speech and, instead, many commitments with the aim of quickly reaching public finance balance and put an end to inflationary Central Bank financing, i.e. a thorough fiscal adjustment, in accordance with the commitments to the Fund and in line with what the markets are demanding. This is, finally, the world of money.
By the way, where does Milei’s approach to provincial public transport subsidies that go directly to passengers, usually with low incomes and precarious jobs, come into play in Caputo’s recipe? Nothing new, A very classic fit.
Source: Clarin
