Argentina's Macrisis: GDP plummets 5.8% in May, worst since 2002 collapse
Data published today by Argentina's National Statistics and Census Institute (INDEC) show that the nation's GDP fell by 5.8% in May compared to the same time last year.
The contraction in the region's third-largest economy was the most severe since October 2002, at the depths of a financial collapse and the largest sovereign default up to then.
Most of the decline this year, according to INDEC, came from agriculture, which plummeted 35% amid the worst drought since 2009. Industrial ouput fell 1.9% amid a 47% prime rate - the highest since 2002.
The economy had recovered from the 2016 recession with 2.9% growth last year. Since then, some 155,000 jobs have been lost from January to May - pushing unemployment up to 9.1%.
The loss is equivalent to 1.2 million jobs lost in the U.S.
Recurring recession
This is the second recession since President Mauricio Macri took office in late 2015.
The current downturn, which began in April, put May GDP 4.9% below the same month in 2015 - the year Macri was narrowly elected promising to spark growth with deregulation and tax cuts.
But a sharp devaluation and utility hikes of over 1000% have hampered the economy and added to already high inflation: Prices have risen 30% from last year, and 115% since Macri was elected - with real wages falling an estimated 13%.
Costly corporate tax cuts failed to spur investment or exports, and nearly $54 billion instead left the country over the past 30 months - $3 billion in June alone.
Argentine foreign debt, as of March, in turn rose 70% to $254 billion, with the public sector's share doubling to $176 billion.
These totals exclude $15 billion drawn from the IMF credit line on June 22 - part of a $50 billion bailout the IMF offered as a credit line in exchange for deep budget cuts which opponents see as both unconstitutional and recessionary.
Troops as cops
Today's GDP data comes a day after Macri signed a decree allowing the nation's armed forces to engage in law enforcement and domestic intelligence - a decree likewise condemned as unconstitutional by most of Argentina's political spectrum.
"It's no coincidence," opposition senators noted, "that now that the situation is rapidly worsening, Macri resorts to law-and-order rhetoric in order to degrade democracy and the rule of law."
At: https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=https%3A%2F%2Fwww.baenegocios.com%2Feconomia-finanzas%2FLa-actividad-economica-se-desplomo-58-en-mayo-20180724-0013.html&edit-text=
Argentines line up last week at a free produce stand organized by small growers as a protest against both the crisis and Macri's austerity policies.
Large landowners have been spared austerity, and will insetad see further tax cuts this year.
