Thursday , April 22 2021

Second recession in the Macri era: in September the collapse was 5.8%

Good Ares. Economic activity fell by 5.8% in September, driven by drastic declines in the trade and manufacturing industries, and thus formalized the second cycle of recession during the Maurício Macri administration.

The National Institute of Statistics and Census (INDEC) reported yesterday that in September the monthly estimator of economic activity (Emae) fell 5.8% in relation to the same month of 2017. The data show the serious scenario of consumption and productive sectors.

This is the second largest contraction of the year: the worst result was in June, when the activity sank 6.8%. At the time, the red was explained by the deep decline registered by the agricultural sector after a historic drought.

But this time it was not the climate or the countryside, but the direct consequences of a paralyzed economy, where the biggest bet of the productive sectors is to try to survive the extreme interest rates they face to finance and run the economy. purchasing power that paralyzes consumption.

This is demonstrated by the official figures for September, which confirm that the sectors most affected were wholesale trade, retail and repairs (-12.8%), manufactured goods (-10.8%), net taxes on subsidies (-10.1% ), transport and communications (-4.6%) and hotels and restaurants (-4.2%), among others.

By contrast, the agricultural, livestock, hunting and forestry conglomerate advanced by 2.2%, and the performance was shared by fishing (2.8%) and financial intermediation (2.7%), among others.

"In order to dissipate the negative impact of the drought, the economic contraction responds to two factors: the increase of the exchange rate and the acceleration of inflation. The consequent reduction of purchasing power in dollars and pesos reduced the demand for durable goods and consumption, which led companies to minimize production, given the rising financial cost of maintenance stocks high in a context of depressed sales, "concluded consultant Ecolatina.

The private diagnosis indicates that another element was "that, particularly in September, the sudden movements of the exchange rate and the expectations of a new agreement with the IMF caused uncertainty to reign, paralyzing the decision-making of economic agents."

With the September red, economic activity accumulated fall in its sixth consecutive month: in April, it fell 0.5%; in May, 5.2%; in June, 6.8%; in July, 2.7%, and in August, 1.9%. The two consecutive quarters in red are the basis for declaring the recession technically.

It is the second setback of the economy in the Macri era. The previous one occurred in 2016. This fall began in March and lasted nine months, with falls reaching 4.9 percent.

For now, economic activity accumulates a contraction of 1.5% and private forecasts anticipate more months in red. Even official auspices indicate that the recession would continue until the first quarter of next year.

Fausto Spotorno, economist and director of the Center for Economic Studies Orlando Ferreres, projected that economic activity will fall again in October, although he has clarified that the decline could be lower than in September.

"We are likely to have a low October, but not so much, in November and December as well." And in March, as the harvest begins to develop, economic activity may begin to recover, Spotorno said, and ironically: "At this point, in the 21st century, salvation is whether it rains or not. "

The dollar jumped a peso in a day

It has been the most notable daily rise since September.

The currency saw a jump of $ 1.07 (2.8%) from Thursday's close to $ 36.56 for the purchase and $ 38.50 for the retail sale. The advance was surprising because, according to the operators, it represented the highest daily increase since the end of September.

In the wholesale sector, where banks and large corporations operate, the dollar gained 1.10 cents on Friday and ended at $ 37.6.

Print edition

The original text of this article was published on 11/24/2018 in our printed edition.

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