What people don't talk about is that the good things the new administration achieved came with a big price: an expected drop of close to 4% in GDP. With the expectation of recovering it fast next year. So next year is the turning point for Milei, if the recession ends or intensifies. A shrinking economy with smaller inflation but in recession is worse than a growing economy with higher inflation.
Also the GDP drop should be bigger but the previous year there was the worst drought in the country's history and it relies heavily on agriculture so the economy was already in a terrible state with a paralyzed and incompetent president at the time. Now the agrobusiness is growing strong (compared to the terrible previous year) but not enough to balance against the recessive economic measures to reduce state spending.
The evil is in the details. The inflation rate pre-Milei distorted economy to the point where any meaningful model based on Austrian or Keynesian or whatever ideas was impossible.
Almost everyone I know and all newspapers I read here, in Argentina, do talk about that. The cost is an inevitable one when you reach 3 digits inflation. Hope we learn our lesson though we didn't in the 2000s when we brought inflation again.
To give anyone reading this perspective, Argentina had inflation for almost 80 years, only a brief pause in the 90s and then again since the 2003. What other way is there?
Of course but once you have 3 digits inflation, what other way to reduce is there besides cutting the supply of money suddenly in a shock? People won't like it, I didn't like it either but the two other presidents tried various methods such as price controls and that didn't help, on the contrary.
If you have long-lasting inflation, you need some shock to cut it. But reducing the supply of money only does shock, it's keeping it constant over the long term that avoids inflation.
And well, price control never works. This is well known. It's also well known that Argentina's last few presidents were people that wouldn't let patently known and unavoidable facts get in the way of their policies...
When in borderline hyperinflation, the GDP number is meaningless.
Also, a shrinking economy with normal inflation is better than a growing economy with hyperinflation, because that second is never really growing, just the meaningless number is going up.
The inflation calculation is the one that doesn't get the inflation correctly into account. That's because it always have errors, and those errors grow more than linearly with the inflation rate.
BUENOS AIRES, Sept 26 (Reuters) - Argentina's poverty rate rocketed to 52.9% in the first half of 2024, the government's INDEC statistics agency said on Thursday, surging from 40.1% a year earlier.
Also the GDP drop should be bigger but the previous year there was the worst drought in the country's history and it relies heavily on agriculture so the economy was already in a terrible state with a paralyzed and incompetent president at the time. Now the agrobusiness is growing strong (compared to the terrible previous year) but not enough to balance against the recessive economic measures to reduce state spending.