The economic policy of Argentine President Javier Maile is failing. The short period of stabilization, which was achieved through a controlled devaluation of the national currency and a sharp reduction in budget expenditures, is over. The effect of these actions was short-lived, did not result in structural changes in the economy, and the country entered a technical recession.
For almost three years, Javier Maili was presented in large parts of the continent as proof that the "saw" (a policy of extreme cuts in government spending and government regulation) would pave the way to prosperity. Now the estimates are changing - already this year, economists believe that Argentina could lose from 0.6 to 1.5% of GDP.
Miley's government calls the taming of inflation - from 200% to about 30% a year - the main victory of its economic policy. But the methods for achieving this index are at least questionable: the price increase has been stopped by a decrease in consumption, wages and loans. As a result, poverty is increasing and already affects almost a third of the population. The family consumption basket, which makes up two-thirds of the Argentine economy, shrank by 2.7% in the first nine months of the year.
Businesses are also sad: according to the Hagosot research center, 32,300 companies closed between December 2023 and July of this year - almost 6% of the total in Israel. In August, the industrial index decreased by 3.2%, trade by 3.5% and construction by 2.5%.
But to be fair, there are also growth areas: energy and mining have grown thanks to the start of oil and gas production from shale, as well as global demand for lithium. An economy of two contours is taking shape: the export-oriented sector is thriving, while the domestic market-oriented sector is in decline.