Last week marked one year of beginning of Javier Milei’s management. Economically, the Government ordered the macroeconomy, successfully defended the fiscal surplus, reduced inflation to 2.4% monthly (according to the November record) and maintained exchange peace after the devaluation carried out in December 2023 and the consequent inflationary flash. But the correlation is not seen in the real economy, given that activity and consumption fail to recover.
There was a drop in productive units of 2.3% (11,931 fewer companies), according to data from the Superintendence of Occupational Risks (SRT) that takes the period between November 2023 and September of this year. Likewise, registered salaried jobs decreased by 220,178 (2.2%), according to data from the Argentine Integrated Pension System (SIPA). The information comes from the latest report of the Vector Consulting, by Eduardo Hecker.
And although In recent months, wages have recovered some of the ground lost against inflation, Since December of last year, “the transfer of income accumulated until September to the detriment of the remuneration of salaried work exceeds the equivalent of US$30,000 million, which explains a good part of the collapse of the records referring to retail sales and consumption ”, adds the document.
The president confirmed that his government carried out “the biggest adjustment in the history of humanity”, However, this statement seems not reflected in discharge levels. “Although inflation is no longer the main concern of the population, which now focuses on unemployment and poverty, the unemployment rate increased less than expected between the fourth quarter of 2023 and the second quarter of 2024, with a growth of 266 thousand people in the unemployed population,” analyzes Vectorial.
The explanation behind this phenomenon
A possible explanation is that many of the unemployed turned to work on delivery or passenger transportation platforms, which has led to an increase in self-employed and monotributist workers. Between November 2023 and September 2024, sand registered 153,753 new independent workers, 6.4% more compared to the previous period. According to data from the platforms, in March, around 80,000 people worked in delivery apps, of which 85% had no other formal job, which could suggest that statistical unemployment has been reduced, although not necessarily real unemployment.
Regarding the level of government approval, The most likely explanation for its apparent “galvanization” could be the lack of political alternatives to La Libertad Avanza (LLA) and its proposals.. Government management has adopted a combination of political tactics, such as the traditional “whip and wallet” with provincial governors and the “chaos engineering” carried out by advisor Santiago Caputo and, to a lesser extent, businessman Fernando Cerimedo. , says the report.
“It is true that the government has demonstrated greater political skill than it was recognized at the end of last year. However, despite the effectiveness of the communication teams in charge of the “chaos engineers” limitations and certain difficulties persist with legislators and clumsiness in their performance throughout the year,” he maintains.
This raises some questions: Do the government’s political successes demonstrate the extraordinary political skill of Javier Milei and his team, or, rather, do they reflect the lack of capacity of the current members of the political corporation, who do not seem to be up to the task? the “political animals” of past decades? Perhaps, the results obtained are due to the stigma of previous poor management and the conviction and audacity of the “iron triangle” that has achieved some successes.
Possibly, the key to these achievements lies in “the systematic non-compliance with the commitments assumed by the government in each negotiation, and the unwavering faith of its interlocutors, who, despite the constant “bends” of the ruling party, continue negotiating with it a and again,” he concludes.
This Monday, the National Institute of Statistics and Censuses (Indec) will reveal the economic activity data corresponding to the third quarter of the year. According to the Monthly Economic Activity Estimator (Emae), the economy experienced seasonally adjusted growth of 3.4% during this period compared to the previous quarter. However, despite this rebound, at the end of September, economic activity was still 0.6% below the levels recorded at the end of last year, after ten months of management.
The report will also provide details on the evolution of investment and consumption in the third quarter. To date, there is no official information on these two key indicators that reflect, on the one hand, the strengthening of installed capacity, which is still below its potential due to low levels of utilization, and, on the other hand, On the other hand, the impact on the purchasing power of households.
The latter have faced not only the fall in fixed incomes and economic adjustments, but also the increase in the costs of basic services.which have increased above inflation, forcing households to allocate a greater proportion of their income to energy and gas expenses, which has negatively affected their ability to consume other goods and services.
Source: Ambito
