MercoPress. South Atlantic News Agency

Milei's alleged success under questioning from studies measuring people's reality

The “blue” dollar reached a new all-time high

While Argentine President Javier Milei tours the world boasting his administration's success in curbing inflation, local reports underscore deteriorating living conditions for most people in his country which seems to be heading for hyper-recession.

Mass consumption fell 14.5% year-on-year in May and 3.1% from April's figures alone, according to pollsters Focus Market, who canvassed retail sales tickets from Scanntech, a company providing code-reading services in 756 points of sale nationwide. “The month of May shows a smaller drop in consumption compared to previous months,” Focus Director Damián Di Pace said. He also mentioned some relief to consumers through the “freezing of public services rates plus prepaid medicine.”

“Sales performance by point-of-sale size is different. The large store format shows a greater drop in consumption compared to the previous month, with -5.1%. Medium-sized supermarkets fell only 0.2%,” he also explained.

In the Buenos Aires Metropolitan Area (AMBA) a 12.9% year-on-year decline was recorded and -2.3% compared to April. On the other hand, in the rest of the country, mass consumption fell 15.5%% yoy and 3.6% compared to April 2024.

Meanwhile, the Gini Index showed an increase in inequality between the part of the population earning the most money and the bottom tier. The best-placed decile of the population now earns 23 times more than the poorest decile. This difference was 19 times a year ago before Milei's devaluation, which mainly impacted food items. The fall in income reached 33.5% year-on-year in real terms among the poorest decile and 20.2% among the richest, with 55% of the population believed to be in poverty.

The National Institute of Statistics and Census' (Indec) Permanent Household Survey (EPH)showed a per capita income 23 times higher among the top tier groups when compared to those ranked at the bottom. The crisis hit the poorest sectors hardest, particularly those with informal jobs. During the first quarter of 2023, this gap stood at 19 times and in the last quarter of last year, it had reached 18 times.

The Gini moves between 0 and 1, with 0 being the greatest possible equality, where everyone has the same income, and 1 being the worst possible inequality, where one person keeps everything. It was 0.446 during the first quarter of 2023 and jumped to an all-time-high 0.467 in early 2024, thus surpassing the 0.451 recorded in the third quarter of 2016 under then-President Mauricio Macri.

In this scenario, the “blue” (a euphemism for “black market”) dollar reached AR$ 1,365, also an all-time high as Milei and Economy Minister Luis Toto Caputo insist there is no new devaluation ahead although the gap between the official quotation and the one available to ordinary people keeps widening.