Compared to the performance of the Argentinian economy this time last year, economic activity is down by 5.8% as the government applies the IMF’s austerity measures, aimed at cutting government expenditures in order to make budgetary room to repay the international bloodsuckers. The Argentinian economy is looking more and more grim.
telesur reports:
The decrease in economic activity in Argentina is recorded as the country applies IMF-sponsored austerity policies.
Argentina’s Statistics and Census agency, the Indec, announced Tuesday that economic activity contracted by 5.8 percent this May in comparison to the same month last year.
The report published by Indec also revealed economic activity decreased by 1.4 percent in comparison to April.
Reuters had projected an interannual contraction of 1.8 percent for May, and economic contraction is expected to deepen. Marco Peña, President Mauricio Macri’s chief of staff, said Tuesday “the next months will me more recessive, cold and stormy.”
According to analysts the contraction is due primarily to the drought that affected the country’s agricultural sector, which has an economic contraction of 35.2 percent, fishing with a drop of 29.2 percent and transport and communications with 4.9 percent contraction.
However another important source of the contraction is a decrease in internal demand, which has been affected by rising unemployment, inflation and currency depreciation. A reduction on internal demand mainly affects industrial growth.
Since Macri assumed the office of the presidency over 73,000 people have been layed off in the public and private sectors.
The manufacturing industry registered its first drop since April 2017, especially in the textile, chemistry, metalworking, oil, plastics and food sectors.
The construction sector grew by 4.4 percent, which is below the 12.4 percent accumulated growth for 2018. According to Economist and Pagina 12 journalist Javier Lewkowicz, deceleration responds to a cut back in public works, which is expected to continue due to the government’s austerity policies.
According to Lewkowicz “a worse result in economic growth is negatively impacting the Federal Administration of Public Income through Value-added taxes, debits, credits and income taxes. That means the government will need to intensify fiscal austerity.”
The IMF’s policies of ‘austerity’ imposed on national economies as a means of fixing all economic problems is something that has a long history of failure, and a long history of suffering in its wake. Argentinians remember the last time they lived under an IMF austerity regime at the turn of the millennium, and that memory drove many out into the streets to protest approaching the IMF for yet another loan, which came accompanied by yet another period of so-called ‘austerity’, which is basically robbing the country blind in order to store up the fruits of the nation’s labour in a coffer somewhere in Washington. Greece, Italy, and others serve as excellent recent examples of just what these austerity regimes do to a country, and what it really means, if the previous example of Argentina’s last IMF experience is too remote. It’s no surprise, then, that the economy isn’t doing all that well, it’s kind of the idea behind imposing the austerity in the first place, extract or prevent public investment in the domestic economy for the repayment of a loan to pay off a bunch of bankers. It sure makes a lot of economic sense.
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