Did Milei just lift Argentina out of recession?

[Murray Rothbard]

Did Javier Milei Just Lift Argentina Out of Recession?

"After decades of economic pain from Peronism and mass money-printing...Milei is showing no signs of relenting in his campaign to crush inflation and government spending to return Argentina to prosperity. " ~Jon Miltimore

www.aier.org

During his first year as president, Javier Milei has been waging a bitter but largely successful campaign against inflation.

Now, Argentines received more welcome news: their economy is growing again.

“Economic activity rose 1.3 percent from April, above the 0.1 percent median estimate from analysts in a Bloomberg survey and the first month of growth since Milei’s term began in December,” Bloomberg reported on July 18. “From a year ago, the proxy for gross domestic product grew 2.3 percent.”

The positive economic report, based on data from the Argentine government, is a surprise to many.

The 2.3 percent year-over-year increase defied expectations of a decline of similar magnitude, Bloomberg reported. As Semafor notes, the Argentine economy was projected to have the least economic growth of any country in the world in 2024, according to the International Monetary Fund.

 

[MilHojas]

The 2.3 percent year-over-year increase defied expectations of a decline of similar magnitude,

We've been through this. This is called propaganda.

https://archive.ph/EK0z8

The agriculture sector drove annual growth in May, more than doubling production from last year when the country suffered a brutal drought, while construction, manufacturing and retail declined, according to the report.

There was a drought last year that suppressed the agricultural sector production. This year, there was no drought, but newspapers are trying to present the improvement as Milei's achievement.

Argentina Economy Posts Best Month Under Milei

Argentina Economy Posts Best Month Under Milei Despite Austerity Archived version The agriculture sector drove annual growth in May, more than doubling production from last year when the country suffered a brutal drought, while construction, manufacturing and retail declined, according to the...

baexpats.org

 

[Murray Rothbard]

It's unlikely that a single sector like agriculture produced an outcome that drives GDP to such a large extent. It's only around 15% of the economy in Argentina.

It will be interesting to see whether the next monthly statistic shows growth too (as is likely). If so that will provide confirmation. Right now it's just a single data point.

By the way what about the fact inflation has been going down on a monthly basis (from memory, with the exception of one month)? Is that propaganda too?

 

[Redpossum]

It's unlikely that a single sector like agriculture produced an outcome that drives GDP to such a large extent. It's only around 15% of the economy in Argentina.

It will be interesting to see whether the next monthly statistic shows growth too (as is likely). If so that will provide confirmation. Right now it's just a single data point.

By the way what about the fact inflation has been going down on a monthly basis (from memory, with the exception of one month)? Is that propaganda too?

Wow, talk about complete failure to understand Argentina. That's just...I have no words.

 

[elhombresinnombre]

Wow, talk about complete failure to understand Argentina. That's just...I have no words.

Go easy on the guy, Red. Remember, he's been dead now for nearly thirty years.

 

[IamWaldo]

It's unlikely that a single sector like agriculture produced an outcome that drives GDP to such a large extent. It's only around 15% of the economy in Argentina.

It will be interesting to see whether the next monthly statistic shows growth too (as is likely). If so that will provide confirmation. Right now it's just a single data point.

By the way what about the fact inflation has been going down on a monthly basis (from memory, with the exception of one month)? Is that propaganda too?

Murray,

As much as i just read this forum, i would like to point something out;

If you first create an artificial spike with 50% inflation and than you go down to 6% ; Ofcourse month to month it will decline, because you created that spike in the first place.
Is it stabilising? i think so, but it's still very high.
I don't see how we can go down, because your blue rate is under pressure and banks still offer a 40% interest per year, meaning that the minimum inflation will go to atleast 3.5% per month.
That's being the general consesus as well, the first part was easy, but now it becomes more difficult to get down to 1-2% per month or ever 2-3% per year.
That will be a heck of a challenge

A general point of view on Milei:
I think it's safe to say that nobody is right now in a better place than it was prior to the elections.
Is Milei doing good things? i think so, shutting down some "bs" departments which are just a waste of money.
Is he doing bad things? definitely too, some things are to extreme to justify his vision.

You say agricultural is 15% of the GDP, so imagine if that has a 50% less harvest due drought, than you will lose approx 7.5%.
Let's say it's 15$ and than you only get 7.5$, that's a 50% drop.
Now next year you get a normal harvest and it goes back to 15$, guess what you get a 100% increase. (read you jump from 7.5$ to 15$)
So numbers don't lie, but perception is a nasty little thing.

 

[Redpossum]

Go easy on the guy, Red. Remember, he's been dead now for nearly thirty years.

You're right. My response could have been more diplomatic. I just cannot see how anyone who actually lives here and follows the news can be so casually dismissive of the importance of agriculture to the Argentine economy.

You say agricultural is 15% of the GDP, so imagine if that has a 50% less harvest due drought, than you will lose approx 7.5%.
Let's say it's 15$ and than you only get 7.5$, that's a 50% drop.
Now next year you get a normal harvest and it goes back to 15$, guess what you get a 100% increase. (read you jump from 7.5$ to 15$)
So numbers don't lie, but perception is a nasty little thing.

"Figures don't lie but liars figure". I'm not accusing the OP of prevarication, I'm just saying that all statistics on Argentina should be regarded with a reasonable degree of skepticism. Almost everyone has a financial incentive to falsify.

 

[Quilombo]

"Figures don't lie but liars figure". I'm not accusing the OP of prevarication, I'm just saying that all statistics on Argentina should be regarded with a reasonable degree of skepticism. Almost everyone has a financial incentive to falsify.

caveat emptor with reason considering this is the front page of La Nacion right now lol

 

[ArgentinaVet]

It's unlikely that a single sector like agriculture produced an outcome that drives GDP to such a large extent. It's only around 15% of the economy in Argentina.

It will be interesting to see whether the next monthly statistic shows growth too (as is likely). If so that will provide confirmation. Right now it's just a single data point.

By the way what about the fact inflation has been going down on a monthly basis (from memory, with the exception of one month)? Is that propaganda too?

What percentage of the foreign currency export earnings (and related taxes ) do you think the agricultural sector is responsible for?

 

[Ries]

What percentage of the foreign currency export earnings (and related taxes ) do you think the agricultural sector is responsible for?

In 2021, the World Bank said- "Argentina is the world's third largest food exporter, with the agricultural sector accounting for 15.7% of gross domestic product (GDP) and 10.6% of tax revenues in 2021."