A report from the consulting firm Audemus details that the average fall could reach 4.9% but with more pronounced declines for industry, construction and commerce.
The consulting firm Audemus produced a report in which it estimates the performance of each of the sectors in Argentina. They anticipate a productive blackout with an average drop of 5%. The document proposes two scenarios: one “optimistic” and the other “pessimistic”, in both they detected falls in 13 of the 16 sectors. The only activities for which increases are expected are agriculture, hydrocarbons and fishing. The most pronounced falls would occur in construction, industry and commerce.
The recession is already hitting the economic indicators hard. A survey by the consulting firm 1816 based on different sources reflects that In January, early sampling shows generalized falls. Among those that stand out are the tax on credits and debits, car and motorcycle patents, the construya index, cement shipments, retail sales and loans to the private sector, among others.
Industry and commerce: they estimate a drop in productive activity
Going forward the outlook is not more encouraging.. The consulting firm Audemus prepared a report with activity indicators and modeling based on the history of the behavior of the different areas. Two scenarios were worked on, one “optimistic” and the other “pessimistic”, in both of which anticipated falls for 13 of the 16 productive sectors during 2024.
In this context, the only categories that would have a positive performance in 2024 are agriculture, hydrocarbons and mining and fishing. Thus, the largest falls would be observed in construction (between -14% and -17%), industry (between -9% and -11.5%), commerce (between -11.5% and -9%). They are followed by “other services” with drops of between -9.5% and -7.5%, transportation and communications (between -8% and 6.5%).
exports-imports-trade-ship.jpg
Depositphotos
In the accumulated, the average fall in production would be between -4.9% and -2.8% depending on whether it is the optimistic or pessimistic scenario. Whether one or the other comes to fruition, according to the consulting firm Audemus, depends primarily on the acquisition of “fresh dollars” that will allow the economy to be stabilized during the second half of the year. In that sense they explain that “The exchange rate can function as a stronger nominal anchor, which would prevent an even greater spike in inflation.”
On this point, they believe that the price variation in an optimistic scenario could reach 284% year-on-year with a 1.1% drop in end-to-end purchasing power, even based on the low comparison base left by December 2023. The Second scenario, foresees a lack of external financing and assumes a much more unstable exchange rate with an inflation of 572% for the year and a drop of more than 9% end to end in purchasing power.
Within the manufacturing sector, some heterogeneity is still perceived. Agribusiness will have a more encouraging scenario than the rest, both due to the better harvest that would positively impact milling, and because it is a basic consumption that is more inelastic to recessions and because it depends more on external demand than other branches. In contrast, Audemus expects greater falls in those items that depend heavily on the domestic market and that are not essential items such as textiles-clothing, footwear, furniture, toys, electronics and white goods, among others.
Finally, Other sectors such as hotels and restaurants, finance, electricity and water, real estate and professional services, teaching, health and domestic services, would also suffer pronounced falls.
Source: Ambito
