Under Milei, Argentina’s GDP falls 1.7% in the 3rd quarter

Argentina’s National Institute of Statistics and Census (Indec) announced this Wednesday (18) that the neighboring country’s Gross Domestic Product (GDP) fell 1.7% in the second quarter of this year compared to the same period last year.

As a result, the Argentine president’s so-called shock therapy has caused the country to accumulate a contraction of 3.4% this year.

In the same period, there was a 9.8% drop in private consumption, a 29.4% drop in investments and a 22.5% drop in imports. The positive balance was limited to the increase in exports, up 31.4%.

Argentine inflation stood at 4.2% in August, up 0.2 percentage points from July’s 4%. The country’s accumulated inflation over the last 12 months is 236.7%.

Read more: Argentine economy surprises negatively again and falls 3.9% in June

On Sunday (15), Milei appeared before Congress to present her government’s budget proposal for next year. In the message, she promised tougher measures called a “fiscal shield” against macroeconomic changes.

“After years in which the political class has been shackling individual freedoms, today we have come here to put shackles on the State. This budget project that we are presenting here today has a methodology that protects fiscal balance regardless of the economic scenario,” he said.

According to the BBC in Argentina, Milei’s measures have had very serious consequences for many Argentines.

In particular, the brake on public works caused a collapse in construction, which fell 32% in the first quarter of the year, according to Indec. The industrial production index fell 15.4% in the same period.

“The collapse was even worse than during the coronavirus pandemic, with falls not seen since the 2001/2 crisis, until now the worst in Argentina’s history,” says the outlet.

Added to this, more than 25,000 layoffs in the State, Milei has already warned that he will lay off another 50,000 employees, in a country where public work has become, in recent years, the main driver of employment.

The BBC also says that the reduction in energy and transport subsidies has directly impacted Argentines’ pockets.

“But that wasn’t all. A large part of the adjustment came about through what economists call ‘spending liquidation.’ This is something that happens when there is high inflation, which ‘eats’ the value of money. If, for example, you have a set salary and it remains the same over time, each month of inflation will reduce how much you can buy with that money,” says the outlet.