Argentina's economy exits recession in milestone for Javier Milei | Hacker News Reader

Argentina's economy exits recession in milestone for Javier Milei

ft.com

Average monthly income for Argentines is a few hundred dollars a month. The largest private employer in Argentina is headquartered in Uruguay.

Argentina is essentially living a Hunger Games reality. An economy designed to solely benefit the capital. Everyone else exists to extract resources for the capital.

Argentina is an economy weakened by Peronism, an ideology that constantly interferes with the free markets, with excessive regulations that incentivize rent-seeking and unproductive businesses.

It'll be much richer if it was designed to "benefit the capital," but it's far from it.

Writing this in case I forget. Somewhere on Twitter. ( And I cant find the exact tweet )

Eliminating Jobs in the public sector with little to zero productivity force those people into private sector and increases national productivity.

Thank the IMF - https://archive.is/cR3Zi

Most of the bail out goes back to Wall St as interest payments on loans Argentina was about to default on and prevents China showing up and taking over. Milei is just a clown to keep the plebs entertained.

leave it to ft.com to paint this as a feel good, happy story. meanwhile, argentinians are facing record poverty levels, inflation at extraordinary levels, and extreme wealth inequality. but hey, recession exited! austerity 1 working proles 0.

Official inflation numbers are extremely low. How does that square with what you just said?

They are not extremely low, they are just lower than they have been. Annualized inflation is still ~160% down from a high of ~300%. Monthly inflation numbers are like what the US sees in a year.

Annualized is around 118%, down from a high of 211%. Last month to month inflation rate was 2.4%, down from 25% on last December. 2.4% annualized is around ~30%, which would give you the following series:

2023 => 211%

2024 => ~120%

2025 (if inflation keeps the same value) => 30%

However, if the government lowers the crawling peg they are instituting, and keep on not printing money, it's possible the inflation rate for 2025 is even lower.

So: Currently not remotely close to "extremely low" as in the comment I replied to.

And it isn't following a nice series like you have, the peak was in April 2024. It's improving! It's not "extremely low", or resolved yet. As I said in another comment, I personally think the directionality of Milei's changes is great. But it is currently still very tough times.

i also hear official inflation numbers in the US are 'low' right now too, yet that doesn't mean prices are down or that things are affordable to the common person. my lived reality talking to actual citizens tells me a lot of folks are struggling. if anything, applying that same experience to argentina is my mistake. i guess.

Low inflation doesn't mean that prices will fall. That would be deflation, and deflation is bad for the economy.

I guess we should ignore statistics and focus on anecdotes when making economic decisions.

I think that you may have seen month-over-month inflation in Argentina, which is 2.4% for November (the lowest in a couple of years). That may seem low, but that's just the change in prices from one month to the next. In USA, the month-over-month inflation is around 0.3%, while yearly inflation is 2.7%. In Argentina, yearly inflation is 166% right now (and it was worse before!), but if they kept 2.4% month-over-month for a year, they'd have 33% yearly inflation - that's still not "extremely low" (e.g. the recent inflation surge in the US only peaked at 9.1% yearly), but it would be the lowest for Argentina since 2018.

https://tradingeconomics.com/argentina/inflation-cpi

https://tradingeconomics.com/argentina/inflation-rate-mom

https://tradingeconomics.com/united-states/inflation-cpi

https://tradingeconomics.com/united-states/inflation-rate-mo...

how could it not be a happy story. meanwhile prior, argentinians were facing even higher poverty levels, inflation at even higher extraordinary levels, and were facing extreme wealth inequality.

At least now, their currency isn't being constantly debased, and the savings of ordinary argentinians aren't being inflated away into the hands of an irresponsible government.

While one might argue that by bringing down inflation things could improve in the long run, it's not accurate to say that previously "argentinians were facing even higher poverty levels". From the article poverty rates have gotten worse:

> The country’s poverty rate soared 11 points in the first half of 2024 to 53 per cent.

Not the guy you replied to, but pretty frequently economic stagnation is caused because folks are stuck in an inefficient local minimum.

To end a period of recession or stagnation, governments almost always have to cause unemployment (or respond to natural unemployment) to force people to change jobs.

This is why Chairman Volcker is remembered so villanously and President Reagan is lionized.

Volcker ended stagflation under both Carter and Reagan by dramatically raising interest rates for a few years.

This led to 11% unemployment, but once folks had found new jobs Reagan was able to preside over an era of strong growth.

Maybe when they get to 70 or 80% unemployment they'll finally be able to move towards a more efficient minimum.

I think you meant to say "local maximum". If they were in a local minimum, moving out of it would improve conditions rather than worsen them. The situation where you can't improve without going down is a local maximum.

This was because the government devaluated the fictitious dollar exchange rate, which had like 100% difference with the actual market rate, which then meant that salaries in dollars went down by a lot, though in actuality they were already down. The other thing is that poverty is now at 46%, so things are improving very fast.

Inflation is still extremely high and poverty levels are even higher now. IMHO the pre-Milei status quo was unsustainable and the directionality of changes he's making is positive, but they are still very much deep in the Pain part of trying to break out of where they were at.

Many people really are much worse off right now. It has to be taken on faith that this is a short term suffering that will pay off later.

Wow, this is a perfect example of talking without knowing anything.

Previous government accrued over 1000% inflation over 4 years, and shit was hitting the fan really hard. Money was worthless, and people spent it as soon as they got it because it was losing ~10% of its value per month.

Current government did an amazing turnaround and fix of the economy, inflation this year is down by half, and monthly inflation rates are back to 2019 levels, which for a normal country is horrible, but for Argentina is pretty great.

Argentina has had poverty for decades now. It was glossed over by successive Peronist governments constantly printing money and giving it to people, which is what's lead to the insane inflation (which has come way down under Milei) and destroyed Argentina's economy.

This is a happy story. Argentina actually has a shot at being a real country with a real economy.

Because everything was going real well up to now.

Of course the American bourgeois press rejoices! They are plundering the Argentinian's working class to fill the pockets of their western Overlords...

With rhetoric like this, one wonders why Argentina has a perpetually mediocre economy.

One could argue that any suspicion of the ruling class in South America and US demonisation is entirely justified:

https://en.wikipedia.org/wiki/United_States_involvement_in_r...

Past events aren't a definite excuse for today's situations. Yeah, the U.S. interfered in many countries, including some that are super successful today, e.g., Taiwan and South Korea.

But many Latin Americans never stop blaming U.S. interventions for everything. Of course, blame a boogeyman instead of wreckless internal economic policies.

Unfortunately, like in Asia or Europe, the US never stopped interfering in the democratic process of South America. Still today, many of those countries are defacto western colonies and lack any independence. And the few who dare proclaiming themselves as Republics tend to end up on western blacklists.

Still today, many of those countries are defacto western colonies and lack any independence.

Can you name even one?

The only one to which the phrase "lacks any independence" could meaningfully apply is Puerto Rico. But even that's not really true, as it continually holds status referenda in favor of actually joining the US over independence. Most recently by a margin of 50-30 - and just a few weeks ago, in fact.

And that's all whilst ignoring the downfall of the Syrian Arab Republic into the hands of western hegemons

Yes, that's exactly why Russia was meddling and Bashar al-Assad was torturing/raping/murdering: to keep that pesky Western influence away.

The noble citizens of Syria obviously accept these human rights violations as a much better option than... allowing decadent Western concepts like "liberal democracy" or "pluralism" into their country.

That's why they're sitting peacefully and not putting their lives on the line for the prospect of a risky future that only seems better compared to a present full of horror, right?

The US has never stopped intervening.

But it is very significant it hasn't involved itself in any armed conflicts in its own hemisphere for more than 30 years.

Except for Trump's threats to invade Venezuala and Mexico, that is.

Argentina's economic woes are because of the cult of peronism

One might ask one question further, why would peronism, a hugely protectionist and isolationist philosophy gain ground in Argentina.

Are you insinuating it's the West's fault?

Yes, big bad America made the Argentina government ignore every scrap of economics and plunge their nation into poverty.

Ignore the massive natural wealth of Argentina or the history of populist strongmen - it's all the US' fault.

Argentine here — the US helped the military coup that overthrew democracy in Argentina and waged a "Dirty War" that saw people drugged and thrown out of helicopters. People born in the 70s grew up while that was happening. It's still living memory.

The US (and other western countries) dictate the price of raw material exports, and drain countries like Argentina of the best talent. They dictate freight rates. To the extent western capital is willing to invest in the country, it is to build roads/rails that take raw materials from the countryside to the ports in Buenos Aires so that a small class of bourgeois vendidos can sell out the nation's national wealth like a fire sale.

Macri is beloved by western media because he's willing to let the IMF and Federal Reserve dictate social policy in Argentina. Slash pensions, crush labor power, etc. My family voted for him and now my grandma needs us to send more dollars over so she can afford to live. Lot of parallels IMO to people on public assistance voting for Trump in the US. There were other solutions possible besides austerity.

> There were other solutions possible besides austerity.

What solutions? How does one fix a hyperinflated country without painful reforms?

Millei made it clear that pre-election that his tenure was going to bring painful reforms. He was realistic, unlike the incumbent Peronists who had no plan.

Argentina spends too much money; that is the core problem. Their debt/gdp ratio is extremely high. There is literally no other solution than austerity. Austerity is the entire point

> Macri is beloved by western media because he's willing to let the IMF and Federal Reserve dictate social policy in Argentina

If you think western news outlets have any affinity for austerity or the IMF, then you're watching fox news or something because most American news media is inclined to support a left wing strong man

It’s been 50 years almost since the dictatorship, it’s time to get over it, most people alive today didn’t live through it.

The us doesn’t drain Argentina of their best talent, Argentina kicks them out with their shitty economy and policies, I know that’s why I left.

Yes, western capital is super evil for investing in infrastructure to move resources. It’s better for the country resources to be laying within the ground making no one money.

There was no other way out since the K printed all the money to finance their madness.

Keep resisting with aguante though, that will work out.

The FT is British not American and their coverage is hardly supportive of Milei.

Oh. You are right for the British thing.

I guess it's the British bourgeois press that rejoices then!

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