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forest444

(5,902 posts)
Fri Jul 22, 2016, 04:11 PM Jul 2016

Argentine GDP declines by 3.1% in June from same time last year.

Economic activity in Argentina, according to a report by the pro-business Center for Economic Studies (EEC), fell by 3.1% in June compared to the same time of 2015; GDP for the first half of 2016 was down by 1.1%.

The decline is in contrast to the 2.4% growth recorded in 2015, before the effects of a 40% devaluation, massive utility and fare hikes, and other austerity policies decreed by the new, right-wing administration of President Mauricio Macri.

The Macri administration had discontinued monthly GDP updates the day after taking office on December 10, and their recent report estimating GDP to have grown by 0.5% annually in the first quarter has been widely dismissed. Macri's claim that private consumption grew by 1.1% and public consumption by 2.7% lacked credibility, local economists pointed out, given the doubling in inflation rates and sharp cuts to public works since he took office.

"This decline resulted from a combination of a recession in manufacturing (0.8%) and of significantly lower crop yields compared to last year, which led to a decline in agricultural output of 8.7%," Orlando Ferreres, the longtime head of the EEC, said. "The fall in real wages locally and the recession in Brazil contributed as well."

Ferreres' manufacturing activity estimates were more positive than those of the National Statistics Institute (Indec), which admitted a decline of 4.3% in May and 3% so far this year.

Ferrered, however, was optimistic going forward. He projected "a partial recovery, especially in the last quarter of the year" - although he admitted such a recovery would be conditioned by "contingencies." "The prospects there are still positive with regard to the late harvests barring unusually bad weather, while public and private construction may begin to recover," he added.

Construction, according to Indec, was down 12.9% in May, and 10.9% so far this year.

Ferreres also pointed to Macri's financial deregulation policies as a possible boost for the economy. "Money laundering could have a positive impact by offering greater financing options; but it will be too little to alter the current trend, such that growth 2016 will still in negative territory."

At: https://translate.google.com/translate?hl=en&sl=es&u=http://www.politicargentina.com/notas/201607/15478-para-privados-la-actividad-economica-descendio-31-por-ciento.html&prev=search

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Argentine GDP declines by 3.1% in June from same time last year. (Original Post) forest444 Jul 2016 OP
My family over there Chimichurri Jul 2016 #1
It's a massive transfer of wealth - only slightly milder than in 1981 and 2001. forest444 Jul 2016 #2
So tragic! Chimichurri Jul 2016 #3

Chimichurri

(2,911 posts)
1. My family over there
Fri Jul 22, 2016, 05:41 PM
Jul 2016

Just got hit with 1000% increases on their electric and water bills. I'm afraid for them

forest444

(5,902 posts)
2. It's a massive transfer of wealth - only slightly milder than in 1981 and 2001.
Fri Jul 22, 2016, 06:18 PM
Jul 2016

Hi, Chimichurri. I'm sorry to hear that about your loved ones. I myself have relatives in Argentina (my parents were born there; they emigrated 30 years ago as a result of Martínez de Hoz's economic collapse), and a few of them have mentioned the same thing - especially those who own/manage small or medium businesses.

And yes: most of them voted for Signore Macri; almost all are now sorry they did.

The hardest-hit people have in fact been small business owners because utility bills are part of their monthly overhead and can't be easily reduced; no one, after all, walks into a store or office with no lights or heat. I understand businesses have been folding by the thousands in a way Argentina hasn't seen since 2002, leaving tens of thousands out of work - which, of course, increases dependence on public assistance (the very thing Macri pledged to reduce).

Basically, it's a massive transfer of wealth from the middle class to the elite: once, by way of the devaluation, which doubled inflation while lining the pockets of those holding dollars (or better still, dollar futures); and then again, with the cuts to utility and fare subsidies and deregulation of same, which is causing these huge tarifazos.

Put another way: Macri and his clique wrote themselves a huge check by devaluing the peso by 40% in one day (just as Alsogaray and the dictatorship did), and are now forcing people to write their corporate backers another huge check by way of 1000% higher rates and fares - checks which will mostly end up in Panama.

Bad for business, and definitely bad for people.

I understand the courts have blocked the water and gas hikes for now, and that's certainly reassuring. The people of Argentina have to make sure Macri abides, because no one else will.

Good meeting you, Chimichurri. Let's keep in touch.

Chimichurri

(2,911 posts)
3. So tragic!
Fri Jul 22, 2016, 10:07 PM
Jul 2016

I was there in February and once Macri said he was a fan of Trump, I knew they were in trouble. His campaign was full of right wing operatives from the US who pulled the Bush tactics that made working class folks vote against their own self interests. It was truly sad to hear working class people, some in my own family, excited they voted for him. Like you said, their regret now is profound.

Nice to meet you too! Let's hope this beautiful country find its way!

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