The widespread and sustained economic recovery is delayed. After suffering falls in the level of production and installed capacity similar to those seen in 2020, from May onwards some indicators show slight inter-monthly improvementswhich allows some economists to claim that “the recession hit rock bottom”. For example, car patenting grew 20.6% inter-monthly, the demand for electricity 4.6% and the cement office 17.9%among other cases.
However, industrialists are wondering: If the worst is really over. There are those who do not dare to answer, but they do admit that the second semester “It will be very difficult”, because complexities are added. Others directly maintain a fatalistic outlook: “This is going to get worse. We haven’t hit bottom yet.”
After overstock, consumption declines and recession
There are several reasons. According to what Ámbito was able to find out, the first has to do with “the end of the last cartridges”. As a result of inflation and the expectation of devaluation, the over stock It was a common practice among businessmen during the second half of 2023.
This is how the businessman explained it Leonardo Romanoowner of Billikenon the YouTube channel, La Fábrica Podcast: “Last year we were all overbuying. You needed 10 for your month of work and you bought 12 or 15.”.
Now, the situation is different. Inflation is slowing down, but the recessionary context is taking its toll on sales. The excess stock has already been consumed, and the drop in consumption is putting the ability to replenish it into question.
This is how they explain it in private: “In these months we banked capital by liquidating stocks, even without making money. Without that,How will companies cope with six more months of crisis??”, they ask if the recession continues.
How could the business cycle adapt in this context? The industrialists consulted foresee a sort of letter “W”: periods of slight recovery that then deteriorate.
It is already known that the drivers of the Government’s recovery do not involve the injection of public spending, nor incentives for consumption or the increase in public works to drive construction.
The government makes clear the factors that it believes will boost the economy: Elimination of inflation and credit restorationThese, in turn, will be the result of a unbreakable fiscal order, significant downsizing of the state and finally, the great promise: elimination of taxes.
However, a businessman who spoke to this newspaper recalled a meeting he had at Casa Rosada two weeks ago, where he asked how many companies would remain standing after the implementation of this economic program.We’ll see who They are really businessmen, they will have to compete. We are not going to intervene.” they responded sharply.
The missing dollars and the prices
Meanwhile, during this zigzagging process, where some data show a slight improvement in activity, the other question that is heard among industrialists is the following: “If for every point of GDP three points of imports are needed, with what dollars will that level of demand be met?”
According to LAMBDA Consultantsthe accumulation of net international reserves is currently in negative territory due to -US$4.8 billion and the cumulative fall of 24% of the international price of soybeans This figure could be further increased in a month in which the BCRA seasonally maintains a selling balance.
Meanwhile, Since August 1, imports of general goods have access to the MLC in two installmentsfor 50% each, which also puts pressure on reserves, since this group of goods represents more than half of total imports.
Faced with this situation, the Government’s response is also well known: bleach and Possible agreement with the IMF -betting on Donald Trump’s victory- as sources of foreign currency.
The last question has to do with the prices. Since the recovery in demand, the result of the weak real wage recovery in the registered private sector, does not have as a direct consequence an increase in supply, “Finding the new equilibrium point could lead to a new price increase“, industrialists warn in dialogue with Ámbito.
Is there an economic recovery?: the experts’ view
For Haroldo Montagu, chief economist of the consulting firm Vectorial“all industry indicators are going down, We don’t see where a rebound could come from.”, and he warns that “Obviously you need dollars to grow and to invest.” that are not there.
In his view, the upcoming data could show “some minimum bounce“But only because “it comes from a very low comparison, which is the second half of 2023.”Be careful not to read it as growth.“, he warns.
In this sense, Montagu argues that “We are going to reconfigure the Argentine industrial sector“oriented to the external sector.” While the use of installed capacity in export sectors, such as oilare at 80%the market-internist sectors, such as carswork at 40%“, compares the economist.
Mauro Gonzalezholder of the General Confederation of SMEsbelieves that the situation “will worsen” because “bottom has not yet been reached”. He admits that the recovery of credit is in force, but it is not used to “invest or expand”; but rather to “sustain the company”.
For the manager, the difference between small and medium-sized companies is exacerbated in this context: “Large companies have the strength to support and adjust variables, such as employment. The girls, when they let go of the human resources, know that the closure is coming soon.“, he laments.
Source: Ambito
