That is curious. What are the causes?
An obsession from a big part of the society to sustain obsolete and uncompetitive industries with state money just to avoid "losing jobs".
Draconian taxation for productive and competitive industries (Ag mostly, IT affected too). Slow, confusing and corrupt bureaucracy requiered for starting a new bussines.
A hecktonne of social assistance that barely keeps the persons from starving but don't provide real social ascension.
Obscene subsidies to electricity and natural gas (think about rich people warming their pools during winter).
Sorry that I don't provide raw numbers, I'm in my lunch break and really don't want to sour it.
http://mriguide.com/argentina-plans-to-outsource-currency-pr...
Milton Friedman called inflation like alcoholism, great at the start but quitting is long and painful and most of the rewards of stopping are delayed with only pain up front.
And if you try to cut the money printer (without taking some.huge debt), you have to squash the deficit, which is mostly subsidies to electricity, gas and public transport, and non-contributive retirements. You can't, politically speaking (and maybe legally too), cut the retirements, so you have to cut the subsidies, which will increase the measured inflation, at least for a few months.
Funny enough, that's what the current government did. They removed a law from the previous government which ensured that pensioners would be paid inflation + x% so that their real income won't decrease, and now the government decides on a whim what the pension raise would be (the pensions have been increased by very little very sparsely), effectively cutting retirements, as inflation eats through them.
They can't cut subsidies because most of their voters are poor, and if they touch that, shit hits the fan, whereas they don't give a shit about old people, since they lose them money and don't vote for them.
I'm so happy to have moved to the us and have a 401k and ira accounts the government can't touch.
But you're right, the use-the-LELIQs-to-increase-retirements plan is marching as intended.
Yeah, they won't say they are doing that, but they are doing that.
Right. Governments would have to do sound budgeting.
But people who advocate for a balanced budget typically get laughed out of the room.
The way I see it, the real reason why governments most often need ever increasing debt-based budgets is: a growing proportion of the circulating money gets continuously redirected into (and by) the financial sector which puts most of the money in the hands of say the richest 10 %. Because these rich people know best how to avoid/minimize taxation this leads to a lack of tax revenue for the government.
Which in turn compels governments to seek other ways to remain capable of acting (deciding how much money for what is one of the key ways of acting out political decisions for every government). So in order to still be able to act, there's only two possibilities left: A) taking on more debt. B) raising taxes. The latter is spectacularly unpopular with most voters (even though additional taxation ought to hit the most wealthy anyway) so it's hardly surprising that most governments prefer taking on more debt. Usually it works "well" because with today's mainstream opinion it's seen as almost natural to take on more debt, whenever big expenses need to be taken care of. Hardly anyone questions the principle, except for Austrian economics proponents, who aren't really taken seriously.
Crypto fans like to compare to the US, but there is a key diff: the work ethic.
Money printing + no production = stealing + inflation + defaults
The US has the production and work ethic to compensate so far
Inflation seems to have been a problem since around 2002. From 2006 to 2015 it was kind of stable but bad. The currency then dropped out.
GDP across that entire period seems collapsed. They constantly are dipping into recessions. Their manufacturing industry seems to be in decline since ~2012. Agriculture is suspiciously flat. Mining is in decline for that entire period. Seems to be whole economy collapse to me.
Labour participation rate is steady around 45% suggesting not much tinkering with employment numbers. Which looks also steady about 42%. Unemployment is pretty steady from about 2006 to present around 6-8%. So their productivity is poor. They'll very likely always be a second world country. What a sad outlook.
Central bank balance sheets are all the rave, they only go back to 2012. It looks as bad as any other country as of late.
Money supply is sky high. They probably have ~300-600% inflation locked in here. Holy.
Interest rates are in the 40-80% ranges? But real yields are negative for sure. You cant save a dime in this environment.
Balance of trade is good since 2019 or so, but that probably lines up well with collapse of their economy. Probably means poverty on the rise bigtime? Otherwise has been bad for years and has been in decline in scope.
Tourism died long before covid. Roughly in 2016 something happened to kill their tourism industry.
Government credit rating is trash. Yet government debt is rising.
Argentina's military spending had been bad since the 1990s.
No surprise to see their economic competitiveness is nearly lowest ranked in the world.
household debt to gdp? Argentina has no household debt? You cant get a mortgage at 40%+ interest rates. Therefore you cant have debt. Their people have no debt and they are sitll in collapse?
Corporate tax rate is recently down from an outrageous 35% to a slightly less outrageous 25%. Personal tax is 35%, Sales tax at 21%. So a total tax burden of easily well over 80%. Argentinian people work for the government at least 80% of the year. Does the government provide 80% back in services and goods? I highly doubt that very much.
Since the problem has been ongoing so long. Politically it can't be solved. I must admit I know nothing about their politicians but if I were to shoot from the hip, their current leadership is not ideologically aligned with fixing it.
So easy prediction without crystal ball? They have at least 3 more years of absolute collapse. We're talking probably 20% of people will enter poverty before this ends. It's going to be very bad for the argentinian folks.
Do you feel the elections are fair? Mandatory voting is a thing eh? Yet still just a 2 party system?
https://en.wikipedia.org/wiki/Republican_Proposal#Economic_i...
Like they are obviously proposing some good options, but they didnt do anything near necessary between 2015 and 2019 and then lost the next election?
Is there any talks of revolution? Probably would have the be violent. Frankly a worse situation than the seemingly ineffective government you have.
If I were to make a suggestion, the world is large. You can move to a country that isn't going to be so broken for the foreseeable future. The move will be painful, but its an investment in yourself and your family.
https://www.canada.ca/en/immigration-refugees-citizenship/ca...
I'm Canadian, but we have a large economic immigration system. You're obviously a tech and know english. You're likely going to be approved quickly.
Because of our relationship with World War 2, we have a worker shortage of 2030 going to hurt us badly. We need people to fill that hole.
Just an FYI, the government at that time (which is the current government) fudged the official inflation numbers to pay less interest and to say there was no inflation, so if your inflation numbers are from official sources for that period, they are not true, inflation increased every year since 2002.
From the numbers it doesn't suggest Greece levels of fudging. There was a few cases where it looke suspicious to be sure. Given the constant dipping into recession. They probably couldn't fudge it as muchas they please.