Private consumption is the main component of the Argentine GDP. In 2001, it stood at 68.9% of GDP, and plummeted to 61.9% in 2002 after the devaluation. Between 2003 and 2018 it grew, despite the fact that there were years with retractions, until closing in 2018 at 69.5% of GDP. Since 2018 it falls every year: in 2021, private consumption represented 61.8% of GDP. “Its incidence is the lowest in the 21st century”analyzed CIFRA.
The reasons have to do in part with the salary situation. In any case, it should be clarified that private consumption in 2021 registered growth compared to 2020, but it was lower than the GDP expansion. For this 2022, the Ministry of Economy and the IMF agreed that consumption (private and public) expand above GDP, but from 2023 to 2027 projections show the opposite. “During this period, growth will be driven by exports and investment,” CIFRA analyzed based on the agreement.
Regarding the economic growth of 2021, which in a single year recovered all the fall of 2020, CIFRA analyzed: “One of the most notable facts of this recovery was the weakness found in the recovery process of real wages, despite the reduction of unemployment”. The unemployment fell to 7% in the fourth quarter of 2021, a better figure than 2017, the only year in which the economy grew in the Cambiemos government. However, the real wages fell 2.3% on average in 2021in registered workers in the private sector, while in unregistered workers the drop was 7.1%, according to CIFRA, which anticipates a “negative outlook”, due to the acceleration of inflation in the first quarter.
The drop in wages also impacted the “regressive” distribution of income, which began in 2018, according to CIFRA. The participation of wage earners in income was 51.8% in 2017, it fell year on year and closed in 2021 at 43.1%. On the contrary, the surplus appropriated by businessmen went from 46.4% in 2017 to 54.3% of GDP in 2021.
“This is not at all unrelated to the behavior of private consumption. Conversely, a significant recomposition of profit margins was evidenced. Between 2020 and 2021, the highest growth in margins appropriated by private companies was recorded (3.7 percentage points)”, analyzed CIFRA.
The internal debate
In the economic team they admit that income is delayed, far from that highest minimum wage in the region in 2015. However, they explain that in the end to end in 2021 registered wage earners were able to beat inflation, despite the fact that the IPC closed at 50.9%, due to the reopening of joint ventures promoted in the second half. In it fourth quarter of 2021, wages closed 2 points above 2020.
On the reasons why the recovery of income cannot be “accelerated”, as proposed by sectors close to La Cámpora, a source from the economic team assured: “The economy grows with demand, with spending, with salaries, but for all that you have to have dollars. You have to speed up everything you can, but within the framework of external restrictions. The differences are for power, not technical”. The Government’s reading is to seek to “stabilize” the macroeconomy in 2022, to save “bullets” for 2023, the electoral year.
Source: Ambito
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