ECONOMIC CRISIS IN ARGENTINA
Argentina's economy is facing a severe recession. With inflation rates surpassing 200% and unemployment on the rise, this South American nation has witnessed a staggering 2.6% decline in GDP for Q1 compared to the previous quarter. This marks the second consecutive quarter of economic contraction, a clear sign of recession.
According to Argentina's statistics agency INDEC, unemployment has risen to 7.7% in Q1 from 5.7% in the previous quarter, resulting in an additional 300,000 unemployed in just 3 months. The leadership of President Javier Milei, elected in December last year, has introduced strong measures such as cutting public spending and ending fiscal deficits.
However, Milei's austerity measures have led to the suspension of critical infrastructure projects, contributing to particularly high unemployment rates in the construction sector. Prolonged triple-digit inflation and frequent economic downturns have forced Argentineans to tighten their belts.
As an economist, Milei believes Argentina urgently needs financial restructuring after years of deep deficits and national debt defaulting nine times in its history. Despite boosting the stock and bond markets, these measures have inflicted severe consequences on the economy, exacerbating poverty and unemployment.
Nevertheless, Milei insists these measures are necessary and will lead Argentina toward a turning point. Latest data from INDEC indicates a sharp 5.1% year-on-year GDP decline in Q1, coupled with a 6.7% drop in consumer spending and a 5% decrease in public expenditure. On the flip side, exports surged by 26%, while imports plummeted by 20.1%.
Information from Reuters
