Share this articleJavier Milei took office as the President of Argentina in December 2023, announcing radical and unpopular measures to cut social spending to meet the demands of the financial market for a zero deficit in public accounts. In other words, to have equivalent spending and revenue.
The president then proposed his Emergency Decree (DNU), the famous Ley Omnibus, and a series of regulations that gave him the necessary power to make the cuts.
He also faced massive demonstrations organized by the country’s largest unions. However, all he managed to achieve in his crusade was a 5.1% decrease in Argentina’s Gross Domestic Product (GDP) in the first quarter.
The data was revealed on Monday (24) by the National Institute of Statistics and Censuses (Indec) of Argentina, showing a 5.1% GDP decline in the first quarter compared to the same period in 2023.
In comparison to the previous quarter (the last quarter of 2023), the first quarter of 2024 saw a 2.6% GDP decline, marking the second consecutive drop and officially putting the country in a technical recession situation.
In parallel with the prolonged economic activity decline, Milei’s adjustments paralyzed a series of sectors that could have boosted the Argentine economy.
The president suspended federal works, transfers to provinces, and subsidies for water, electricity, gas, public transport, and other essential services.
The disinvestment in education and health is also worth noting. The halt in federal works and public infrastructure sectors resulted in the closure of venues, consequently increasing unemployment levels, which rose from 5.7% at the end of 2023 to 7.7% in the first quarter.
In total, there are about 300,000 new unemployed individuals.According to Indec, Milei’s ultra-liberal revenue measures led to a 6.7% decrease in private consumption in the first quarter compared to the same period last year.
Public consumption also dropped by 5%. With an accumulated inflation rate of 276% and this context of paralyzed economic activity, 41.7% of Argentines now live below the poverty line. The country has nearly 47 million inhabitants.
