A simple review of the main economic indicators helps to see how unsustainable the current model is. There is not a single piece of data that allows us to see that any of the variables that affect people’s reality are going to improve (even in the long term); rather the opposite.
On the productive side, the Manufacturing Industrial Production Index (IPI) corresponding to the month of January fell 12.4% year-on-year and 1.3% monthly for the series without seasonality. In this way, the indicator shows its worst January in the series that began in 2016, as well as the worst month since June 2020. The utilization of installed capacity in the first month of the year was 54.6%, the worst January since 2002, which indicates that we will have to wait a long time to start seeing new investments in the industry.
The seriousness of the situation is manifested, among others, in cases such as that of Aluar, a national aluminum producer, which decided to paralyze its plants for 30 days in response to the 35% contraction in its sales.
According to figures released by the Association of Automotive Factories (ADEFA), during the first two months of the year, national vehicle production showed a decline of 18.2%.
Regarding the patenting of agricultural machinery, if the current performance is compared with that of February 2022 (a way to avoid the distortion generated by the drought when making comparisons), the last month is 50% below .
For its part, the Synthetic Indicator of Construction Activity prepared by INDEC presented an interannual drop of 21.7% and a monthly drop of 10.2% during January for the series without seasonality.
On the consumption side, the INDEC released the billing figures for sales in supermarkets and wholesale self-services corresponding to December 2023. It is observed that the sector showed a real interannual drop of 6.7% and a real monthly drop of 5.5%. . Thus, consumption in these businesses had its lowest level since October 2020 (38 months). It is a reflection of the fall in the purchasing power of the population due, mainly, to inflation. In fact, with the 13.2% in March, a price increase of 71.3% has accumulated since December.
In social matters, according to INDEC, in February a typical family needed 691 thousand pesos to not be considered poor. The increase was 15.8% monthly compared to January, that is, above inflation. The basic food basket required to avoid falling into poverty, meanwhile, reached 323 thousand pesos, an increase of 13.1%.
There is not enough space in this column to list all the effects that are being recorded, which are added up week by week. Barely three months have passed and the damage is already accumulating in production, consumption, income and living standards of the population, among others.
The rise in unemployment that is being experienced will in turn mean a decrease in consumption and will feed back the negative effects on SMEs. There is no history of an adjustment as brutal as the one that is being carried out.
In his speech before the US Congress, Joe Biden left several phrases to take into account, which speak of the contrasts with respect to the models. For example, he pointed out that “the recovery of the United States is the construction of an economy that arises from the center and rises from below, and not falls from above.” The opposite of the spill, that is, with significant intervention by the State.
He also emphasized: “now instead of importing foreign products and exporting American jobs, we are exporting American products and creating jobs in the United States. Here in the United States, where it should be!” It is the opposite of the import opening proposed by the Milei government.
The ruling party tries to make people believe that adjustment and absolute deregulation are necessary to later be better off. No takeoff can occur if production, consumption and salaries shrink, and if everything is left to market forces. We already experienced all of this in the past, with the civil-military dictatorship, with Menem and with Macri and, in addition to ending in deep crises, it goes against what many countries with high levels of development do.
National Deputy Union for the Homeland. Solidarity Party President
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
