First change:
Argentina’s presidential elections are taking place amid an economic downturn and rampant inflation, which has reached record levels in the past three decades, as well as rising poverty and extreme poverty rates. Will there be a solution to the country’s economic crisis in times of regime change?
The country’s gross domestic product fell by 2.8% in the second quarter of this year, indicating a strong economic slowdown, according to the latest official records.
Households face a steady loss of purchasing power due to the exponential increase in the Consumer Price Index. According to the National Institute of Statistics and Census (INDEC), the rate rose to 138% in September, up from 88% a year ago.
This situation is reflected in higher prices of goods and services such as clothing, entertainment, culture and food.
Economic analyst and consultant Juan Carlos Juarez says that one of the first challenges is to rethink foreign trade and increase competitiveness.
We cannot continue to be an exporter of primary commodities. We need to provide more support to the products we sell in the value chain so we can continue to sell grains. Why do we sell soybeans for pig feed to China and not soybean oil or soybean meal or many soybean derivatives? If we’re going to exploit lithium, we can’t just take lithium out of Argentina in bulk, it has to be value-added, it has to be batteries. This represents a paradigm shift in what is considered Juarez.
When asked about the steps a new government should take, the analyst opined that there are no magic formulas: “I believe there are no miracle steps, no timely decision-making, what needs to be coherence and effect. Economic matters. , but it is a government or a Not just about political division.
Rising poverty rate
The new government will face a small challenge: inflation is rising and salary depreciation is steady, official figures show a poverty rate that exceeded 40% of the population in the first half of the year. Nearly 3 million households are estimated to be poor in urban areas.
According to the economist, one of the causes of poverty is inflation, which is why it is necessary to change the management of monetary policy.
“For the central bank to have real autonomy, it cannot be an appendage of the Ministry of Economy. Political decision-making in economic matters cannot be mixed with what regulation means as far as the financial sector is concerned. The other issue for Argentina is that there should be clear rules for the agricultural sector as soon as possible.
According to this analyst, a new rural policy will also be needed to reduce poverty levels in the country. “We have a country that can export soy, wheat, meat, corn, and we need a clear policy and gradual reduction of withholding. Today withholding is about 30%, which means that for every 10 dollars produced in farm exports, 3 is taken by the state,” he explained. .
As far as economic growth is concerned, the forecasts are not very encouraging. The International Monetary Fund projects that Argentina’s GDP will fall by 2.5% this year, signaling the new administration’s immediate efforts to reverse this trend. The same monetary fund predicts that rates will only reach 2.8% by the end of 2024.
