Argentina's Macrisis: Industrial output plummets 11.5%, worst since 2002 collapse

[sandensea]

Data published last week by Argentina's National Statistics and Census Institute (INDEC) show that industrial production fell by 11.5% in September from the same time last year.

The downturn was the most severe since a 12.2% decline in July 2002, at the depths of the 2001 collapse, and, for this September, the second most severe in the world next to Burundi.

Declines were registered in nearly all sectors, led by drops in textiles (24.6%), publishing and music (21.6%), machinery (20.5%), and rubber and plastic (20.4%).

Only steel and aluminum registered growth (2.7%), bouyed by higher demand from neighboring Brazil.

After doubling since the 2002 lows, Argentine manufacturing has struggled since President Mauricio Macri took office three years ago: Output fell 4.6% in 2016 and grew 1.8% last year before resuming its decline in May.

Free trade policies and rising imports were compounded by utility rate hikes of over 1000% and two recessions, to create the most sustained industrial downturn since the 1999-2002 collapse.

September's decline, moreover, was led by falling demand, rather than rising imports: Fixed investment that month fell by 18.9% and imports, by 21.2%; industrial investment plunged by 33.4%.

Over 98,000 industrial jobs have been lost under Macri as of August, or 7.8%.

Disbelief

The crisis has troubled even Macri's most supportive industiral leaders.

"Interest rates are absurd. Inflation is at 45%, so how can interest rates be 70%!?" Cristiano Ratazzi, the chairman of Fiat Argentina, lamented.

Fiat has cut its local production from 77,000 in 2015 to 33,000 last year, and recently announced its assembly line will be suspended until next March.

The Italian-born Ratazzi, 70, had been an early and vocal supporter of Macri, whose father was born in Rome, and two years ago suggested a monument be built to the president.

"One day," he noted, "the market stops believing you."

At: http://www.batimes.com.ar/news/economy/sharpest-monthly-drop-in-industrial-activity-since-2002-prompts-concern.phtml

Workers at the Tandil Metalworks protest the closure of their auto parts factory, which opened in 1948.

Tandil is Macri's hometown.

[Judi Lynn]

1. No doubt Fiat's Ratazzi is hoping no one will approach him asking when the statue of Macri is due.

How long can Fiat afford to do business any longer with Macri's Argentina?

Only steel and aluminum registered any growth at all. Probably an oversight, to be corrected soon.

I noticed one of the articles mentioned that Argentina had been a food-exporting country until Macri. I guess he took care of that, didn't he?
Now industry, even music! Good grief.

It would be interesting if someone bugged Mari's offices sometime. It would be worth everything to hear what it is he says to his staff, and confidants about how well he's doing.

Amazing news. What a shame.

Thank you, sandensea.