The manufacturing production index from INDEC suggests that 2023 was the worst year for the national industry in almost a decade. Only one month in 2019 and three in 2020 recorded records lower than the average drop of 12.8% in December 2023. This paints a grim picture for the national industry, with factory activities experiencing significant declines in December 2023 compared to December 2022.
Agricultural machinery, the steel industry, electrical equipment, and appliances, as well as base metals all saw substantial decreases. The production of food and drinks of Argentina was also affected, with significant drops in sectors such as beef and oilseed grinding. These declines show that the industry has been in decline for a long time, reflecting low-quality, unstable, and unproductive jobs and deteriorating salaries. Informal employment without labor or social coverage has reached around 47% of existing employment in the country.
The construction statistics also reflect a bleak outlook, with a drop of 12.2% in December 2023. Business expectations on employment, hours worked, and GDP all indicate a lack of optimism in the industrial sector. This is also evident in the retail sales figures, with an average drop of 28.5% in January compared to January of the previous year.
The Central Bank’s survey predicts that the price index will only return to single-digit numbers in July, indicating high levels of inflation. The overall picture is one of stagnation and large-scale inflation, also known as stagflation, characterized by uncertainties and a significant impact on the most vulnerable social sectors.
The lack of a clear plan to address stagnation and inflation has raised questions about the government’s approach to economic challenges. Commitments to achieve balance in public accounts and end inflationary financing of the Central Bank are seen as a step in the right direction by some, while others question the impact on provincial subsidies for public transportation and their effect on low-income individuals with unstable jobs.
Ultimately, it is clear that significant challenges lie ahead for the national industry and the wider economy