Monday, May 27, 2024

ECONOMY | 11-05-2024 09:23

Private-sector investment suffers biggest fall of Milei government yet

New report by Orlando J. Ferreres & Asociados consultancy firm highlights slump in monthly gross domestic investment. Data shows "indicators of activity worsened" in March, mainly due to slump in construction sector.

Argentina’s economic recession continues to make itself felt in private investment with a year-on-year fall of 22.3 percent in March, the deepest of the Javier Milei government to date.

The accumulated contraction of this variable in the first quarter of this year was 16.6 percent.

A new report by the Orlando J. Ferreres & Asociados consultancy firm measured a slump in monthly gross domestic investment of US$5.311 billion for the third month of this year.

According to the data, the machinery sector was down 5.5 percent from the previous March with an accumulated dip of 7.2 percent for the first quarter.

Imports advanced 5.8 percent while national products fell by 19.8 percent.

On the other hand, the speed of the plunge in construction accelerated at 36.1 percent less than March, 2023.

“A contraction of this indicator on that scale was only registered in the 2001-2002 period and the quarantine months of 2020. In accumulated terms, the sector fell 24 percent in the first quarter,” detailed the report, pointing out that “during March all the indicators of activity worsened with the estimated gross investment no exception.”

“The trend towards contraction accelerated, in particular for the construction sector, where the panorama is discouraging,” the report warned.

One of the main aspects of Javier Milei’s "chainsaw" plan in pursuit of a fiscal surplus for 2024, has been to slash public works projects. This has led to an almost absolute paralysis of the works, irrespective of the state of progress, and a resulting slump in the purchase and sale of the corresponding inputs, as evidenced by the decline of the Construction Index and the declaration of a "state of emergency" by the CAC (Cámara Argentina de la Construcción) chamber.

According to CAMARCO president Gustavo Weiss, this has already triggered the loss of some 100,000 jobs.

“People need to get back to work and these difficulties exist,” he affirmed in dialogue with the Canal E economic news network.



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