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Adjustment as a priority

Adjustment as a priority

The axis of the national government’s policies It is based on the “achievements” achieved in terms of fiscal adjustment. However, The consequences of the use of the “chainsaw” and the “blender” as public policy tools are going deeper and deeper in citizenship. This is demonstrated by the evolution of macroeconomic variables and, more particularly, the daily news of factory closures, layoffs, demonstrations by certain sectors due to the abrupt drop in their income, lack of financing in the delivery of essential medicines, among others. others.

The economic activity decreased by 8.4% year-on-year in the month of Marchand accumulates a 5.3% drop in the first quarter of the year compared to the same period last year (-3% compared to the previous quarter). Notably During 2023 the evolution of the economy was strongly affected by the drought, which implied an abrupt drop in agricultural production. This year, however, the greatest contribution to the decline was given by the industrial sector, followed by commercial activity.. It is not an exogenous shock caused by the climate, but rather the losses were caused by the policies applied. Almost half of the industry’s installed capacity is idle, or, in other words, its utilization in March reached only 53.4%, about 22 percentage points less than last year.

Are Figures are expected given that industrial activity fell 15% year-on-year in the first quarter and construction plummeted by more than 30%, also in the same period. In particular, it became known these days that metallurgical production fell by 19.5% year-on-year in April. According to the report from the Association of Metallurgical Industrialists (ADIMRA), the drop recorded in that month is “one of the four strongest contractions in the last 8 years, only surpassed by three months in 2020”, during the worst of the Covid.

These are some examples that describe what is happening with the economy and that have their correlation in the drop in the level of income. For example, the Workers’ salaries (INDEC data) recorded a real year-on-year drop of more than 15% in the first quarter and the minimum retirement pension (ANSES data) also decreased by 27% in that period, including bonuses.

The latest private consumption data provided by INDEC from the survey of Supermarkets and Wholesale Self-Services reflect this lower purchasing power of the population. The first quarter recorded the worst value of the series (which began in 2017, and which therefore include the period of the health pandemic) with a reduction in sales, in real terms, of 11.1% compared to the first quarter 2023.

This context refutes the words of the Minister of Economy, Luis Caputo, who This week, during his speech at the Congress of the Argentine Institute of Finance Executives (IAEF), he noted that “there are several indicators that are beginning to show economic recovery.” And then he assured “that those who have the least are putting in more effort than anyone else,” definitively burying the idea that the adjustment is paid for by “politics.”

Javier Milei, For his part, he flaunted the adjustment he is making and He considered that “we got a little out of hand”. However, he once again pointed to the Legislative Branch: “the only thing they are doing now is sending projects to Congress, for what? “To break our fiscal balance.” He also described the function of the legislators, defined them as “spending-maniacs, degenerates of public spending” and promised to “veto any project they send from Congress, that wants to break the box.” Clearly the President reiterates the absolute priority that he assigns to the fiscal surplus without considering the social cost that it carries, in addition to ignoring the powers that citizens granted to national legislators.

The initiatives that began to be discussed last week in Deputies tend to reverse the freezing of budget allocations to universities and restore the National Teaching Incentive Fund (which was defunded by the libertarian government after being in force for 25 years), which would imply an improvement in the meager salaries currently received throughout the country.

The government constantly makes it clear that its priority is to achieve fiscal surpluses by reducing public spendingeven if this means defunding the provinces, eliminating public works, increasing the rates of public services, cutting retirement and teaching salaries or firing public employees, with the high social cost that these decisions entail.

Source: Ambito

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