How is the Argentinian economy not even in worse shape?

[gracielle]

Coronavirus. Terminaron mal los presidentes que despreciaron a los economistas

Coronavirus. Terminaron mal los presidentes que despreciaron a los economistas

www.lanacion.com.ar

27 May 2020
Responding over the weekend why not call a committee of experts in economics and other disciplines to join the doctors who advise him in the battle against the coronavirus, President Alberto Fernández explained that the problem is that economists respond to interests and "they are not always on the side of life."

Impressive the confession of the head of state about his feelings and perceptions, with all the letters. Remarkable for the sincere and sobering comment, from now on; and because it allows to understand what many of the political leadership in Argentina think about the basic laws of the economic balance, in particular those who reach the positions of greater responsibility....

Google Translate

 

[milanesas]

I've had similar thoughts about a seemingly lack of businesses closing permanently to date. My explanation is that the whole coronavirus thing happened so suddenly that everything is in a suspended state still and people are having a hard time getting a clear understanding of reality, kinda like the car has gone off the cliff but hasn't plummeted yet. Business owners scrapping together money and favors to get by temporarily, government offices being closed making it hard to really close or legally go bankrupt, uncertainty if this is a long term issue or just a matter of months. I also believe the government is still prohibiting laying off employees, so fear of legal repercussions could be motivating owners to figure out a way to keep going.

 

[gracielle]

..... I'd say a collapse is coming at the end of 2020, early 2021.

I think the collapse may come, but later than your estimated dates. I believe this gov't will continue to print pesos and hand out subsidies to their lower income constituency. Their immediate intent is to win the mid-term elections in October, 2021. This has not just being a Peronista/Kirchnerista tactic. Macri took a similar action in 2016.

 

[antipodean]

60% of companies who applied have still not received ATP support to pay salaries. (my own included)

As milanesas nicely said, many have already fallen off the cliff and are still bracing for impact. Once the money is spent... it's gone for good. But knowing Argentina there will probably someone with k-onections ready and waiting to "buy up" what businesses once had on the cheap.

 

[Dougie]

Their immediate intent is to win the mid-term elections in October, 2021. This has not just being a Peronista/Kirchnerista tactic. Macri took a similar action in 2016.

That's a good point - I agree.

 

[milanesas]

I think the collapse may come, but later than your estimated dates. I believe this gov't will continue to print pesos and hand out subsidies to their lower income constituency. Their immediate intent is to win the mid-term elections in October, 2021. This has not just being a Peronista/Kirchnerista tactic. Macri took a similar action in 2016.

I've been here for 13 years and most of that time basically every economist/financial publication/investment firm has continually said Argentina is 6-12 months away from a complete collapse, and it still hasn't ever really come to pass despite some serious economic pain during the entire period. I'm almost convinced the country will endlessly barely escape the worst possible outcome through a constantly evolving set of bizarre economic policies and last second deals.

 

[Bajo_cero2]

I would have expected more widespread business closures, bankruptcies, and abject poverty after weeks of economic shutdown and skyrocketing inflation. Somehow Argentina is surviving. How?

We are always in crisis. Simple. And the government is doing a great job.

 

[gracielle]

I've been here for 13 years and most of that time basically every economist/financial publication/investment firm has continually said Argentina is 6-12 months away from a complete collapse, and it still hasn't ever really come to pass despite some serious economic pain during the entire period. I'm almost convinced the country will endlessly barely escape the worst possible outcome through a constantly evolving set of bizarre economic policies and last second deals.

I sincerely hope your theory is correct. I believe in being prepared for any economic/financial scenarios that may impact my situation adversely...and if they don't materialize, I celebrate.

 

[rickulivi]

Why haven't things crashed, yet? My feeling is because businesses in Argentina have little to no debt, so it's easier to survive during hard times. Individials also have little to no debt. Americans. on the other hand, are top heavy with debt: car loans, students loans, credit card loans, mortgage loans, etc. Most Argentines are OK living with little; they can do without a flashy car, or expensive junk you just accumulate. I manage some apartments in California, and each unit has an enclosed garage to park a car. Do you think tenants do this? No, they park in the streets, and fill the garages with JUNK. And the junk stays there; nobody ever uses it; it's just stored. And then you have companies like Public Storage, where they rent small rooms so you can stash more junk. Americans are hoarders; go into any of my tenant's apartments, and you can hardly walk there's so much junk everywhere. Americans can't live without excess baggage; Argentines are more frugal, because of their own limitations. Thus, they can survive better when times are tough.
That's my explanation as to why things have not crashed, yet.

 

[on the brink]

I've been here for 13 years and most of that time basically every economist/financial publication/investment firm has continually said Argentina is 6-12 months away from a complete collapse, and it still hasn't ever really come to pass despite some serious economic pain during the entire period.

"The reports of my death are greatly exaggerated"

Cable sent by Mark Twain to the American press, after his obituary had been mistakenly published. He was in London, not dead.