The data corresponds to a survey to the Argentine cost of production index, prepared by the Argentine University of the Company (UADE). Despite the exchange pax and the country’s low risk, the industry continues to lose competitiveness due to exogenous factors to the factories. The work carried out by Javier Milei, Fausto Spotorno, emphasizes that “The cost of production in Argentina increased by 25% in dollars since December 2023, while the American IPP showed a variation close to 4%.”
For the renowned consultant “This divergence reveals that the increase in local costs is mainly explained by domestic factors such as the real appreciation of the exchange rate.”
The document emphasizes that “the improvement in financial conditions still fails to compensate for the impact of inflation, salary recomposition and the increase in key supplies.” For Spotorno “These increases negatively affect profitability, hinder long -term planning and limit the investment and expansion capacity of companies.”
Increases that cannot be transferred
Industrialists say that the cost rise cannot be transferred to the consumer and that inflation today is being motorized by services. “The price game is playing elsewhere. Values are not being validated due to market shrinking and because there is a lot of imported productin the metallurgical sector 5% monthly imports grow imports, ”said Elio del Re, president of Adimra.
Meanwhile, the rise of costs continues and the head of Industriales SMEs from Argentina, Daniel Rosato, warned the scope for a new jump of energy. He said that in some cases the invoices tripled in the last month by the wholesale component.
In the textile sector they ensure that the market is shrinking: “Everything is very complicated, what we see is that there is no demand, the situation is tense more and more and employment will be resent,” said Mauro Gonzales, businessman of the sector and president of the SME Confederation.
Unlike what happened months ago, In the Argentine Industrial Union (UIA) the coincidence is almost total: “The thing does not go”. The entrepreneurs took to the increase of the dollar of the last wheels as a symptom of that sooner or later, there must be changes in economic policy, either by fiscal or by the exchange front.
With stabilization alone it does not reach
The UADE report also extends the horizon and compares the current levels of industrial production with those of April 2017, the last period of relative stability in Argentina, and warns that “there is a more pronounced deterioration” because fourteen of sixteen items have falls.
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He job of Spotoral Raise something background: what Stabilization will not be enough without structural reforms. “It is essential to move towards structural competitiveness that does not depend on exchange adjustments, this implies policies such as the reduction of operating costs, the improvement of productivity and efficiency at all levels,” he says and adds that “it is key to boost an agenda of reforms such as the tax, in addition to promoting strategic investments in logistics and energy infrastructure and incentive to innovation.”
In general, industrialists agree with that reading, but they emphasize that The situation is urgent. And above all, they warn that with exports from Asian countries that have high levels of subsidy, it will be impossible to compete. They claim a commercial policy that takes into account the anti -competitive behaviors that are increasingly common in a world in commercial war.
Source: Ambito
