Recession Continues Under Macri

[jeff1234]

Bloomberg


Argentina’s Economy Shows No Signs of Exiting Recession

Charlie Devereux November 30, 2016 — 3:51 PM EST

• Industrial production shrank 8% in Oct., construction 19%
  
• President Macri has promised a recovery in the fourth quarter

Workers guide a concrete mixer inside the construction site for a building development in Buenos Aires, Argentina, on Friday, Nov. 25, 2016. Photographer: Sarah Pabst/Bloomberg

The economic recovery Argentina’s President Mauricio Macri promised isn’t materializing on schedule.
Industrial production contracted 8 percent in October from a year earlier, while construction shrank 19 percent, the statistics agency said on Wednesday. Both indicators, which account for about 20 percent of the economy, worsened from September readings.
“We haven’t seen the recovery we were expecting since September,” said Orlando Ferreres, director of consulting firm Orlando Ferreres & Asociados. “There’s been several u-turns that have caused a lack of confidence and on top of that real wages have fallen 5 percent.”
Macri told Argentines that the economy would start to recover by the fourth quarter, later than his initial pledge, after some of the steps he took to make the economy more competitive ended up delaying a rebound. The latest statistics suggest the year-long recession still has a way to go.
The economy shrank 2.1 percent in the second quarter from the previous quarter, its third consecutive quarterly contraction.

https://www.bloomber...iting-recession

 

[Ries]

yet another example of how belief in trickle down economics is not enough to make it actually work.
Certainly, Christina wasted money, paid off friends, and cooked the books.
But under the Kirshners, they did indeed transfer a lot of money to the lower and middle classes, who promptly spent it, and it did affect the economy.
Faena is spending lots of money- in miami.

 

[camberiu]

When you build your entire recovery premise on attracting some mythical foreign investment, instead of structural reforms, the outcome could not possibly be different.
The only surprising thing here is that folks actually expected a different outcome.

 

[ben]

People did expect structural reforms, at least baby steps that will offer assurance that more are coming. How else do you attract foreign investment?

Hence my rant the other day about the continuing mail cluster^^^^. It's not that I care personally, at all - I never, ever, used the mail to bring anything here (except Fedex for a stack of documents 7 years ago), and doubt that I ever will. My concern in this regard is that it's an excellent canary in the coal mine* that indicates the general livability of the country. It's a fairly straightforward problem to solve (forfeit N amount of duties in the name of things being manageable) and a fairly urgent one: a normal country needs a working mail service FFS. And still the bureaucracy around it has proven impossible to abolish, even by someone who seemed to "get it".

I harbor little regret for my initial optimism, but camberiu's view - which view I held one was not obligated to take at the time, based on the evidence - is turning out to be accurate.

Voting for Macri was still imperative - I have little doubt that under CFK Anibal Axel and Co. we'd have gone the way of our Bolivarian neighbors. (Anyone remembers that the final weeks of CFK rule, most airlines stopped selling tickets in Argentina?) But the net change is that things are worse, as opposed to apocalyptic.

* Where the analogy would have been the opposite of what it normally refers to: a canary that stops dying.

 

[Jaredberryman]

When you build your entire recovery premise on attracting some mythical foreign investment, instead of structural reforms, the outcome could not possibly be different.
The only surprising thing here is that folks actually expected a different outcome.

Couldn't agree further. It's still very hard to do business here, taxes are stifling, beauracracy is still heavy, all the rules are against employers and provide benefits to the employees, and they keep artificially maintaining the rate of the peso. Macri took away some subsidies, and that's about the only structural change. Who would want to do business here with a climate like that? No one has the guts to make those changes anyways, though. There would be a revolt.

 

[JoeGillis]

Couldn't agree further. It's still very hard to do business here, taxes are stifling, beauracracy is still heavy, all the rules are against employers and provide benefits to the employees, and they keep artificially maintaining the rate of the peso. Macri took away some subsidies, and that's about the only structural change. Who would want to do business here with a climate like that? No one has the guts to make those changes anyways, though. There would be a revolt.

I couldn't agree more, Tex. A sorry state of affairs.

 

[Noesdeayer]

Tex:
It might be worth it to try a couple of those reforms by decree and risk a "revolt" De La rua tried it by bribery with the padded envelopes (which the Brazilians know quite well).but it didn't play out too well because,I believe,it wasn't the right moment.
It was much easier in Brazil because of the strong loyalty owed to Temer by the needed congressional majority.Macri 's party isn't in control of congress and the unions are not behind the needed reforms
This very well could be the moment for some harsh discipline from the gov't.This is still a very adolescent country politically speaking.The different sectores of the population and business community wait for these things to be done for them.Then they see if they like them or not.No one here wants to sacrifice anything but they want a whole lot in return.I say begin with one decree on ,for example, curtailing unemployment indemnity and study the kickback.

 

[camberiu]

People did expect structural reforms, at least baby steps that will offer assurance that more are coming. How else do you attract foreign investment?

Lots of people expected/hoped for it, but I never saw Macri provide any evidence that his campaign was the harbinger of those reforms. Maybe because I grew up in this region and have plenty of experience with lousy local politics, but I saw him as the typical Latin American politician from a mile away. Like the rest of the lot, he is an opportunistic, spineless, uninspiring politician who is there just to benefit himself and his cronies.
I won't argue with anyone that he is better than Cristina. But he falls way short of what Argentina really needs. And I blame the population too, who is not willing to fight for reforms. For what is supposedly the most well educated and well read country in Latin America, they have been very disappointing in their political apathy.

 

[Somewhereinba]

It's very difficult to polish a turd - Macri has decades of anti-business pro free shit to get past. This is going to take a lot of time - it's like slowly getting a heroin addict off drugs.

 

[camberiu]

Tex:
It might be worth it to try a couple of those reforms by decree

I doubt that he ever gave these reforms even a moment of through. So he can't decree what he does not know. Macri is an element of the status quo. His business thrive in the bureaucracy, market opacity, corruption, cronism and lack of competition. Real structural reforms brings him no benefits. He does not want to fundamentally transform Argentina. All he wants is to bring Argentina to the "good old days" of the 1990s.