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Wed Aug 24, 2016, 07:21 PM

Argentine GDP fell by 4.3% in June from the same time last year - sharpest decline since 2002 crisis

Argentina's National Statistics and Census Institute (INDEC) today published its first Monthly Economic Activity Estimate since November. Argentine GDP, according to the report, fell by 4.1% in June compared to the same time last year; GDP for the first half of 2016 was down by 1.3%.

This was the third consecutive monthly decline, with April and May both down 2.1% from a year earlier. This trend is in marked 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 right-wing President Mauricio Macri.

This monthly GDP report is the first since the Macri administration decreed a statistical blackout within days after taking office last December; that report, published November 20, showed growth in September 2015 of 2.8% from a year earlier.

An earlier quarterly report, published by INDEC on June 29, had estimated GDP to have grown by 0.5% in the first quarter from the last time last year. Its 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 Macri took office.

While monthly reports exclude a detailed sectoral analysis (that should appear in the next quarterly report, due in September), INDEC's other recently published data suggest that manufacturing and construction are bearing the brunt of this recession. Manufacturing declined 6.4% in June according to the latest report, while construction did so by 19.6%.


Inflation, estimated by the City of Buenos Aires to have doubled to 47%, is also taking a toll on retail sales. The CAME medium business chamber estimates real sales to have fallen in July by 8.1%, and INDEC's own data on supermarket and shopping center sales is even worse. The June INDEC report showed that while the peso value of sales rose by 27% in supermarkets and shopping centers, real sales in each fell by nearly 14%.

The latest quarterly INDEC labor market survey, published yesterday, showed that unemployment rose sharply from 5.9% in QIII 2015 (the last quarter covered before the statistical blackout) to 9.3% in QII 2016 - a 64% increase in the number of unemployed in just six months and the highest level in almost a decade.

At: https://translate.google.com/translate?hl=en&sl=es&u=http://www.ambito.com/852282-segun-indec-la-actividad-economica-cayo-43-en-junio&prev=search

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Reply Argentine GDP fell by 4.3% in June from the same time last year - sharpest decline since 2002 crisis (Original post)
forest444 Aug 2016 OP
Judi Lynn Aug 2016 #1
forest444 Aug 2016 #2

Response to forest444 (Original post)

Thu Aug 25, 2016, 01:36 AM

1. Curious to learn if Macri has any influence over the INDEC.

Looks as if some very credible people question its accuracy, or truthfulness.

The numbers are horrible.

It takes far more money for people to buy the same things. That can't help.

Fewer and fewer people working now, through no fault of their own.

Doesn't look as if Macri intends to slow this plunge into the pit, either, for the public well-being. As with Trump, he probably is making big profits off their misfortune. So sad. He has no impulse to help them, since it's not in his interests. That's the big mistake sitting in the Casa Rosada.

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Response to Judi Lynn (Reply #1)

Thu Aug 25, 2016, 09:43 AM

2. Macri's campaign promises are like his marriage vows: made to be broken (and quickly).

Every one of these policies contradict Macri's campaign rhetoric from last year - and in fact corroborate Scioli's warnings (which Macri referred to as a "campaign of fear". The middle class was very cleverly led to believe that "only the lazy indians and illegals" would feel a pinch under his "reforms."

No wonder Trump is so fond of Macri; even the Donald has to be impressed with a flim-flam this shameless.

As for the INDEC, it was always my belief that NÚstor Kirchner made his single worst mistake when he began interfering with it in 2007 - because once he did so it became a political football (which Macri is now using for his own ends, albeit to no effect).

It started out as the silliest dispute, really. Health insurers had announced a substantial increase (25%, if I recall) in premiums for '07; but the Health Ministry, which has to sign off on all premium hikes, only approved about half that much. INDEC, however, had already prepared - though not quite published - their January CPI estimate (which included the 25% insurance rate hike); but because the hike ended up being about half that much, Kirchner insisted their estimate be revised accordingly - from 1.5% to 1.1%. The Chief Consumer Price Analyst, Graciela Bevacqua, resigned in protest.

Kirchner did this to hold down interest payments on CPI-linked government bonds; a 7-point underestimate in inflation saved the Central Bank up to $3 billion a year in inflation-indexed interest payments. Needless to say, the opposition used the controversy to discredit all INDEC data, even when the IMF - no friend of Argentina - refused to do so (they correctly used the Economy Ministry's implicit GDP prices in lieu of the CPI figure).

This brings us to Macri, who simply used the dispute as an excuse to force INDEC to stop publishing any data for as long as he could (knowing the data would show that he was pushing the country into a deep recession); even the IMF called him out on it. Bevacqua, for her part, was brought back to INDEC when Macri took office - but then resigned in protest (again) when she saw that Macri had no intention of giving the agency its independence back.

Anyone could have told her that.

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