The South American country continues to face economic recession amid inflation of more than 200% and rising unemployment.
On June 24, Argentine statistics agency INDEC said that the country’s first quarter GDP decreased by 2.6% compared to the last quarter of 2023. This is the second consecutive quarter that the economy has contracted, causing them to fall into recession. withdraw.
INDEC also releases employment figures. Accordingly, the unemployment rate here increased to 7.7% in the first quarter, up from 5.7% in the last quarter of last year. This means Argentina recorded 300,000 new unemployed people in 3 months.
People walking on the streets of Buenos Aires in November 2023. Image: Reuters
This is the first quarter Argentina is led by new President Javier Milei. He was elected last December, after winning with a series of ambitious commitments, from reducing public spending to ending the fiscal deficit.
Inflation has been at three-digit levels for the past year, along with the economy falling into recession many times, causing Argentine consumers to tighten their spending. When President Milei tightened public spending, many of the country’s infrastructure projects were stopped, causing unemployment to increase in industries such as construction.
Argentina inflation in the period 2018 – 2024. Graph: Statesman
Milei is an economist. He said that this country needs to restore financial order. For many years, Argentina has been in deficit. They have defaulted on their debt nine times in the nation’s history. Argentina’s image in the eyes of global investors is also increasingly deteriorating. The country’s May inflation was 276.4%.
Since taking office, Mr. Milei has implemented a series of measures to have a budget surplus. The stock and bond markets are accelerating, but the economy is suffering as the number of poor and unemployed people is also rising. However, Milei believes that this is a “necessary medicine” and the economy will have a turning point.
Yesterday’s INDEC data also showed that compared to the same period last year, GDP in the first quarter decreased by 5.1%. This level is lower than analysts’ forecasts.
Consumption decreased by 6.7% over the same period last year. Public spending decreased by 5%. Imports lost up to 20.1%. In contrast, exports increased by 26%.