Milei and Caputo’s hug on the day of the presidential inauguration.

A lead lifeline. President Javier Milei published a photo on his social networks in which he is seen hugging his Minister of Economy, Luis Caputo. He did it on the occasion of the new inflation data for the month of April, which was 8.8% monthly, and he referred to it as a “goal” hug. But the photo can also be interpreted as someone hugging a lifeguard, with little to show and a lot of crisis to come.

One of the main reasons why Luis Caputo is in front of the Ministry of Economy is his promise to obtain “fresh dollars” to stabilize the economy. The serial debtor, friend of financial capital, the one that back in 2018 Milei himself had described as “irresponsible” and having burned “15 billion dollars of reserves”, does not have that “achievement” yet to his credit, which does not mean that it did not issue public debt when it had the opportunity. Among them, the famous “Bopreal”, a voucher tailored to importers.

The celebration of high inflation as if it were a success in the economic direction covers up very deep problems and the certainty that with each passing day, pockets begin to kill the story and the unrest against the Government grows.

– Inflation: from “theft” to “blender” Minister Caputo is one of the main people responsible for inflation reaching levels of 25.5% monthly last December. Milei’s government accused Massa of having left “repressed inflation”, but even if that were the case, his debut with the liberation of prices including rentals and prepaid payments, the rise in the exchange rate by more than 300% and the high rates only pushed it further upwards the business rebranding and speculation.

Compared to that “milestone” in the country’s economic history, April’s 8.8% sounds like an “improvement.” However, it barely involved returning to the levels of October last year (8.3%), and represents almost double the average monthly inflation that has existed since December 2016 (4.8%), when the new survey began. CPI. Milei himself, who criticized the “theft” of the inflation tax, now celebrates the “blender” on salaries, pensions and social contributions and celebrates the fiscal surplus supported by a brutal adjustment.

On the other hand, the so-called “deceleration” from stratospheric levels has a component of “repressed inflation” that Milei does not like. The flattened dollar and the temporary suspension of some planned rate increases sought to reach this single-digit number in April to have “something” to show. Milei and Caputo seek to cover up that among the main factors of the data there is another more serious one, the strong slowdown in industry, construction and consumptionor because of depressed income.

If the inflation rate continues like this (8.8% monthly), at the end of the year it will end at 224% annually, above the 211% with which it ended 2023. If, in the best of cases, the inflation rate drops at an average of 5% monthly, it will end the year at 144% annually. The Market Expectations Survey carried out by the Central Bank projects an annual rate of 161.3%. But any forecast is futurology, since any sudden change, devaluation or bullfight cannot be ruled out, and where week after week the struggle against the adjustment plan is played out in the streets.

-Economic activity: industrial collapse

In recent months the activity indicators have been in red. As Pablo Anino explains, technically, when the official INDEC data corresponding to the evolution of GDP during the first quarter (January-March) of 2024 is known, the economy will be declared in recession by accumulating two consecutive quarters of decline.

Another indicator is the contraction of construction activity measured in cement shipments, of 36% year-on-year in the month of April.

For its part, in March, the manufacturing production index fell 6.3% compared to February and 21.2% compared to March of last year. There is no industrial sector that has not shown pronounced falls. This had its correlation in industry and commerce, where layoffs and lack of employment are beginning to be felt. Recent registered employment data shows a loss of 63 thousand jobs between December and February.

-Poverty: 3.2 million new poor

According to Di Tella University estimates, between January and March of this year there are 3.2 million new poora direct effect of the chainsaw and the blender mercy. They total like this 11 million new poor since the IMF set foot on Argentine soil in 2018 with the stand-by loan from Mauricio Macri.

Even the BBC made a crude report to show the increase in poverty under Milei’s government. Journalist Ione Wells, who interviewed the president last week, made an audiovisual report with testimonies from soup kitchens, which despite receiving more and more people in vulnerable situations, suffer the impact of the adjustment due to the non-delivery of food. The government responded this week with the persecutory allanamiento of social organizations and political leaders of soup kitchens in popular neighborhoods.

– Salaries: pulverization of purchasing power

The cost of the Total Basic Basket (CBT), which measures the poverty line, rose 67% and the Food Basket 55% in the four months of Milei’s government. In this way, a household made up of two adults and two minors needed $828,158 in April to not be poor.

According to the INDEC Wage Index, in the period November 2023-March 2024, the drop in purchasing power reached 12 % between the formal private sector workers and 21% among formal workers in the public sector. The biggest drop in formals occurred in December and then moderated. Among the informal workers the decline is 27% with significant falls after December.

In the case of Minimum salary, vital and movil, to which many benefits are tied, including the Empower Work social plans, between November 2023 and April nominally rose 38.9% compared to inflation that accumulated 107%. It has lost a total of 58% of purchasing power since 2015.

Retirements: an attack across the line

In the case of retirements, which deserve a separate paragraph, not only should the brutal loss of purchasing power with inflation and the liquefaction of bonds who receive the minimum pensions and the lowest salaries after, but also the change in the mobility formula through a DNU, with which they seek to obtain a new slice to “tie” the increases to inflation and avoid any recovery, for minimal whatever.

Now the attempt at a new looting with the elimination of the moratorium pension provided for in the Bases Law. Without this modality, 9 out of 10 women of retirement age will not be able to do sobut neither do 7 out of 10 men.

Faced with this panorama, of an imminent recession together with inflation that pulverizes salaries and pensions, it is necessary to give a strong organized response from below. The strike on May 9 was forceful despite the attitude of the union leaders. There is strength to fight and recover everything lost in these years.

Next week the draft Basis Law and tax reform will be discussed in the Senate. The union centers of the CGT and the CTA cannot repeat the scenario of their treatment in Deputies where they called for silence, they must call for a new active general strike, with a large mobilization in Congress, to reject it because it implies a hard blow to the working class. This must be the start of a fighting plan to defeat the Milei government’s plan, rejecting the entire law and for the annulment of the mega-DNU and the Bullrich protocol. Only the general strike can defeat the overall plan.


Leave a Reply

Your email address will not be published. Required fields are marked *