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Court ruling and economy contraction push Argentine inflation down in August

Monday, August 29th 2016 - 03:59 UTC
Full article 25 comments

Inflation in Argentina during the current month of August could drop to 0.7% because of the Supreme Court’s decision to strike down the hikes in natural gas prices for residential users, according to the official stats office Indec. Similar stats also indicate a strong contraction of the Argentine economy. Read full article

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  • Enrique Massot

    “...a strong contraction of the economy...results showed that recession is accelerating...”

    Another story full of bad news about president Macri's handling of the economy that follows a previous article reporting raising unemployment.

    As a much touted “rain of investments” remains a distant and blurry future, Argentina continues to plunge deeper and deeper into yet another dark period--only eight months after a new government took charge of business.

    The unemployed continue to multiply; lower consumption levels and a wave of imported consumption goods is hurting small and medium-size retail outlets and producers.

    ”Nevertheless, (Todesca) said there’s a 'reasonable expectation for the scenario to improve...'”

    Indeed. Hope in a better future is the only positive feeling reminding. As they say, “hope is the last thing you lose.”

    Aug 29th, 2016 - 04:49 am - Link - Report abuse 0
  • Think

    TWIMC

    Funny parallelisms and worrying divergences in Argentina's corruption...

    FELISA MICELI...:
    Former Economy and Production Minister of Argentina...
    The police found, in June 2007, a quite unexplainable bag containing 100,000 ARS and 31,670 USD in her office...
    She was forced to renounce almost immediately and convicted, the same year, to 4 years imprisonment and 8 years inhabilitation...
    https://es.m.wikipedia.org/wiki/Felisa_Miceli

    GABRIELA MICHETTI...:
    Current Vice President of Argentina...
    The police custody stole, in November 2015, a couple of quite unexplainable bags containing 245,000 ARS and 50,000 USD from her house...
    This was some 9 months ago... She is still in office and has just recently been imputated...
    https://es.m.wikipedia.org/wiki/Felisa_Miceli

    Irony of destiny..., the public prosecutor in both cases is the same person!
    Let's see if our judicial system treats all persons equally...
    Dum Spiro Spero...
    El Think.

    Aug 29th, 2016 - 07:27 am - Link - Report abuse 0
  • Enrique Massot

    #2 Think

    Absolutely. And there is more:

    Prosecutor Guillermo Marijuan, who conducted search warrants with excavators looking for buried money in CFK properties, was heard on a voice message promising somebody to leave Cristina “at the edge of being arrested,” with prohibition of travelling out of Argentina and obligation to show up to testify in court.

    The recorded voice message shows a clearly inappropriate attitude for a prosecutor, who appears to be reporting about his work to somebody who is not a member of the judiciary.

    Marijuan's message also reveals animosity against the person he is prosecuting, which is inappropriate for a prosecutor, who must keep an objective stance when trying to gather proof to convict someone.

    More importantly, the incident goes on to show the role of part of the judiciary, which has been working overtime to link CFK to some illegal activity. (So far they haven't found any solid leads--no offshore accounts for example-unlike president Macri who is still being investigated after the Panama Papers revelations).

    Some info in English about the Marijuan voice message:
    http://www.bubblear.com/im-on-the-brink-detention-cristina-kirchner-takes-to-twitter-over-leaked-audio/

    Aug 29th, 2016 - 02:48 pm - Link - Report abuse 0
  • Think

    DUM SPIRO SPERO las proximas elecciones ;-)

    https://days.to/27-october/2017

    Aug 29th, 2016 - 04:43 pm - Link - Report abuse 0
  • Skip

    Yes, the corruption in Argentina is terrible.

    Thank you for highlighting it Think.

    Aug 29th, 2016 - 05:40 pm - Link - Report abuse 0
  • Think

    Je vous en prie, Skippy....
    Enlightening the erring, the ignorant and the naive... is just my thing....

    Aug 29th, 2016 - 06:00 pm - Link - Report abuse 0
  • Zaphod102

    @1 “Another story full of bad news about president Macri's handling of the economy that follows a previous article reporting raising unemployment.”

    Really? I thought reducing inflation was good news.

    “Back in 2007, ..., unemployment stood at 8.5% in the second quarter,” and it is now 9.3%. Given that the numbers for the intervening years are meaningless due to the “manipulation” and “government meddling” it seems reasonable to conclude that between 2007 and 2015 the real unemployment was greater that 8.5% and possibly more than 9.3%. If so, Macri has actually reduced unemployment! Impossible to prove without the correct numbers but it is a distinct possibility!

    “Other Indec stats help to understand the “across the board” drop of prices in August, closely linked to a strong contraction of the economy.”

    I'd question this since “in the first half of the year, the Argentine economy fell by 1.3%” which isn't as strong a contraction as the reduction in prices. I remember from my Economics classes that there were 2 types of inflation “cost push” and “demand pull”. I think it is fairly clear that Argentina has been suffering from the former. Macri's actions to reduce taxations (an official cost) and corruption (an unofficial cost) could also be used to explain the numbers. If this hypothesis is correct, it would be interesting to see a calculation of how much the K-crony corruption increased costs and slowed down the economy when sufficient facts become available.

    I note that the protest against Macri at the Casa Rosada the other day wasn't very well attended. Are the anti-Macri crowd running out of support (or choripans)?

    Aug 29th, 2016 - 06:07 pm - Link - Report abuse 0
  • Skip

    Highlighting not enlightening!

    Big difference, but unsurprising it is lost on you. v

    Aug 29th, 2016 - 09:36 pm - Link - Report abuse 0
  • Think

    You are tooo easy kiddo...
    Chuckle chuckle...

    Aug 29th, 2016 - 09:46 pm - Link - Report abuse 0
  • Marti Llazo

    And now, for some real enlightenment and chuckles:

    “The tragedy of Argentina - A century of decline”
    “One hundred years ago Argentina was the future. What went wrong?”

    “One hundred years of ineptitude”

    “The country’s dramatic decline has long puzzled economists.....”

    http://www.economist.com/news/briefing/21596582-one-hundred-years-ago-argentina-was-future-what-went-wrong-century-decline

    Aug 30th, 2016 - 04:35 am - Link - Report abuse 0
  • Enrique Massot

    #7 Zaphod

    “I note that the protest against Macri at the Casa Rosada the other day wasn't very well attended.”

    Which one, Zaphod? There have been so many I lost count!

    Aug 30th, 2016 - 04:35 am - Link - Report abuse 0
  • golfcronie

    Far better to demonstrate than look for work, God forbid. Time will tell Chuckle chuckle.

    Aug 30th, 2016 - 08:56 pm - Link - Report abuse 0
  • Marti Llazo

    Article on ending the “Lie Machine” created by Kirchner

    http://www.bloomberg.com/news/articles/2016-08-31/imf-may-lift-argentina-censure-by-november-after-praising-revamp

    Another example of Kirchnerist Argentina seeking distinction:

    “Argentina in 2013 became the first country to be censured by the IMF for failing to report accurate economic data. ”

    Argentina didn't win any awards on this one, though, which was pioneered by Joseph Stalin:

    “When private economists began publishing their own surveys, former [Kirchner] Commerce Secretary Guillermo Moreno fined more than a dozen research firms for producing reports that differed from government data.”

    Sep 01st, 2016 - 01:38 pm - Link - Report abuse 0
  • Zaphod102

    @11 ““I note that the protest against Macri at the Casa Rosada the other day wasn't very well attended.” Which one, Zaphod? There have been so many I lost count!”

    I was only aware of one so maybe none of them were well attended?

    Sep 01st, 2016 - 01:46 pm - Link - Report abuse 0
  • Marti Llazo

    @11 “I note that the protest against Macri at the Casa Rosada the other day wasn't very well attended.” Which one, Zaphod? There have been so many I lost count!”

    --- “.... wasn't well attended...”

    Maybe kirchnerism is not spending enough of their ill-gotten gains to pay the populacho to attend and eat the choripanes.

    Sep 01st, 2016 - 05:09 pm - Link - Report abuse 0
  • Enrique Massot

    Another demonstration that could be the largest so far, took place in Buenos Aires and other major cities across Argentina yesterday.
    Citizens protested against ”economic austerity, widespread job losses and soaring cost of living under President Mauricio Macri’s Let’s Change (Cambiemos) administration.” (Buenos Aires Herald).
    http://www.buenosairesherald.com/article/221016/gov%E2%80%99t-faces-fresh-massive-protest

    On another note, numbers published by the INDEC show a deepening of ongoing recession, with industrial activity down by 7.9 percent in July compared to July 2015.

    “Construction fell by a staggering 23.1 percent,” reported the BA Herald.
    http://www.buenosairesherald.com/article/221016/gov%E2%80%99t-faces-fresh-massive-protest

    No government ever has inflicted so much damage to the Argentine economy in such a short time.

    Sep 03rd, 2016 - 04:07 am - Link - Report abuse 0
  • Marti Llazo

    @ 16 -- reekie: “No government ever has inflicted so much damage to the Argentine economy in such a short time.”

    You clearly were not here in 1982. Nor in 2002. At least not with open eyes.

    BTW, reekie, the economic downturn affects the entire region, and not just Argenzuela.

    Sep 03rd, 2016 - 06:06 am - Link - Report abuse 0
  • golfcronie

    @16
    And how would you make Argentina great again, you are always complaining. How many months has Macri been President? It will take many years for to turn Argentina around after so many years of ineptitude

    Sep 03rd, 2016 - 06:50 pm - Link - Report abuse 0
  • Enrique Massot

    #18 golfcronie
    Again: Argentine electors voted Macri into government because he promised to make things better--not worse. If he couldn't he should have stayed home.

    #17 Marti Llazo
    Everyone!! Must see this!
    Martillazo has just discovered that there is a downturn that “affects the entire region” (not just Argentina).
    Funny he did not know that such a downturn existed before Dec. 10, 2015.
    Marti: wrong again. Not 1982 or 2002: these previous disasters took place over much extended periods.

    Sep 06th, 2016 - 06:48 am - Link - Report abuse 0
  • Marti Llazo

    Wrong again, reekie, economic events in both years during 6-month periods were greatly worse for Argentina than what has been observed during a given 6-months time since last December.

    If you think that 2016 is a bad economic period, then let's also take the Wayback Machine to 1989, when the chickens of quasi- Stalinist central planning came home to roost in Argentina. April 1989: 387 percent devaluation of the currency. 5000 percent inflation that year (200 percent inflation in just the month of July 1989 - CFK would have been envious). Food shortages, rioting, looting, attacks on police stations, businesses shuttered, unemployment over 7 percent, industrial production down more than 7 percent, gasoline prices jumped 60 percent, recession with 9 percent contraction of the economy, fiscal deficit with government expenditures of more than 35 percent of GDP, GDP off by more than 6 percent, imports down 21 percent. And those were the good numbers.

    But for reekie, the real crises of the past are just some much nicer.

    Sep 06th, 2016 - 02:01 pm - Link - Report abuse 0
  • Zaphod102

    @19 “Argentine electors voted Macri into government because he promised to make things better--not worse. ”

    Of course, but he's also introduced some honesty into the reported statistics. Now, if the correct statistics look worse than before it does not necessarily mean that he's made things worse, he's just truthfully reported how bad things actually are.

    For example, when he removed the dollar clamp the peso devalued. Was this worse? Not really because if you remember that far back Argentina had two exchange rates - the official rate and the blue rate. One was a work of fiction and the other was close to the true market rate. So when he removed the clamp the official rate moved to close to the blue rate as you'd expect (and as I predicted at the time). Did it make things worse? No, because business carried on as it had before with the blue rate using the new, more realistic official rate. Nothing really changed. Except things got better because a lot of illegal middle men were removed from the system and the government stopped spending its reserves in an attempt to artificially bolster the peso.

    So, in your world, Macri made things worse by causing the peso to devalue but the reality was that the peso had already devalued.

    You are trying to shoot the messenger.

    Sep 06th, 2016 - 05:24 pm - Link - Report abuse 0
  • Marti Llazo

    @ 21 The former false rate of the peso made unattractive argentine products even less price-competitive. One of the concerns of the current government is that the peso/dollar exchange is staying too strong and should be devalued further. Without growth in exports to bring in dollars, the reserves will plummet further. And hard currency dollars are needed for that US$10 billion or so each year that Argentina is spending on imported energy which residents are receiving for next to nothing, and wasting. (Let us recall the wonderful economic picture that CFK generated in 2013: in just 8 months Argentina bled US$9 billion while bringing in just US$3.6 billion from exports -- a US$5.4 billion Kirchnerist deficit, a trend which continues to this day. )

    We would also do well to remember that under CFK, productivity by Argentines plummeted, and that has contributed to lower real income today. In 2013, GDP per capita was about US$15,000. At the end of the CFK regime, when Kirchnerism had generated an annual (2015) inflation rate of over 40 percent, GDP per capita had dropped to about US$10,300. Actually it's probably less, as economic statistics are being cleaned up. Here is a hint, reekie: Argentina's trend to lower productivity has been going on for years. When you're not producing something of value, don't expect to get paid for nothing. I know that is a hard concept for you to grasp.

    Sep 06th, 2016 - 06:54 pm - Link - Report abuse 0
  • Enrique Massot

    #21 Zaphod

    ”...when (Macri) removed the dollar clamp the peso devalued. Was this worse? Not really,“ a jubilant Zaphod assures us. ”Nothing really changed.“

    Come on Zaphod! Are you talking about Argentina? The real Argentina? Or a country your imagination has created?

    ”...in your world, Macri made things worse,“ Zaphod declares.

    Would't be nice if things happened only in ”my world“ instead of hurting flesh and bone Argentines?

    In the real Argentina, prices increased and wages are getting behind--for those who still have a job.

    No matter. Eternal optimist Zaphod is not afraid to ignore the day-to-day reality of Argentines.

    ”...things got better because a lot of illegal middle men were removed from the system,” he candidly proclaims.

    Let's hope Zaphod is well sheltered.

    Sep 06th, 2016 - 07:07 pm - Link - Report abuse 0
  • Zaphod102

    “Eternal optimist Zaphod is not afraid to ignore the day-to-day reality of Argentines.”

    I'm not ignoring the reality, I've never claimed that all is well in Argentine. Far from it! I'm saying that a big hole has been dug by CFK and Macri has 1. Stopped digging (good), and 2. started the slow process of filling in the hole with some promising early signs (also good).

    I'm pointing out that you've been ignoring reality for the last 12 years and it seems to be a habit that is hard to break. Now that Macri has revealed how bad that reality is you are blaming him for everything.

    BTW, did you know that studies have shown that optimists tend to live longer happier lives?

    Sep 07th, 2016 - 02:59 pm - Link - Report abuse 0
  • Marti Llazo

    @3 reekie: “In the real Argentina, prices increased and wages are getting behind--for those who still have a job.”

    In the real Argentina, which is far from reekie's understanding as well as physical presence, price increases during the past 8 months have been, well, at about the same rate as during the 8 months that preceded those 8 months. A similar condition for wages. The trends we see today are nothing more than continuations of trends going on for years here.

    Let's remember that during the first 8 years of the CFK regime, the “official” Argentine peso lost two-thirds of its value. Reekie's memory, it is not so good.

    As far as “jobs” we see that those who are doing productive work in competitive occupations are doing productive work in competitive occupations. But those formerly engaged in making noncompetitive junk to be offered at stupidly high prices, not so much. And those formerly engaged at making the equivalent of buggy-whips for which there is no modern market, not so much. And those formerly engaged in producing materials for which there is little demand, not so much. And those formerly engaged in activities in which their low productivity could no longer be tolerated, not so much. And those who were placed on bloated public payrolls by the Kirchner regime as political favours or pawns, not so much. And those placed on bloated public payrolls by the Kirchner regime who didn't do any real work or even show up, not so much. And those placed on payrolls by the Kirchner regime to literally steal materials from certain of the public agencies, not so much either.

    There is still a great deal of dead wood to be be removed, and much house-cleaning to be done.

    Sep 07th, 2016 - 04:08 pm - Link - Report abuse 0

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