For the first time in ten years, GDP should fall in an election year

The Argentine economy is facing a period of persistent macroeconomic imbalances: high inflation that adds to the drop in GDP leads to stagflation (inflation without growth). Added to this are the effects of a devaluation and interest rates above 66% per year at 10 days; which generates an explosive badtail for businesses and consumers on a daily basis.

This is the reason why the relationship observed since 2011 during the election years, with a greater increase in public spending and a delay in the exchange rate prompting the reactivation, is collapsing.

On the contrary, the years when there were no elections (or even years), during which the exchange rate has changed, since it does not find the brake of the latent electoral front, this results in pressure on prices and a fall in the economy.

Taking into account the average product for the second term of Cristina Kirchner (2011-2015), GDP increased by 0.4% cumulative per year; while for Mauricio Macri, if the expected decline of 1.2% is recorded for 2019, it shows a recession accumulated at the rate of 0.77% per annum.

In both periods, the economy fell by 1.5% in nominal terms, at a rate of 0.18% per annum, but adjusted for population growth of 8.9%, depending on the variation of the last census, meant: a real contraction over the 8 years of 9.6%, at a cumulative rate close to 1.2% per year.

By contrast, GDP per capita, which represents per capita wealth, is slightly lower than in 2010.. It is expected for this year that it will hardly exceed $ 10,000. This means that the degree of well-being is virtually similar to that of ten years ago, nothing has improved.

The volatility of the economy, in a mediocre trajectory of growth and slowdown of activity and persistence of high inflation, prevents the absolute progress of the population as a whole, as well as the relative retardation of development that the most of the 220 economies in the region. world

In general average, the level of Global GDP has risen by 27.6% since 2011. This is why Argentina's relative share of 1.34% in 1980 rose to 0.68% 10 years later..

These fluctuations lead to arrears and exchange rate corrections that go against the development of foreign trade; it feeds the risk rate of the country, which is the thermometer of investor confidence in the rest of the world; and it hampers the strengthening of public finances, as it has to allocate more revenue every year to cover social spending and less for infrastructure work.

The government of Cambiemos tried to break with the history of stop & gostop and grow without leading to the same place, but to a clear deterioration of the well-being of the population. But the magnitude of the imbalances, coupled with the obvious shortcomings of some unexpected policies and circumstantial factors, both on the home front as well as floods and droughts; and in external wars, the trade wars between the great powers, as well as the impatience of many people to demand immediate results, have made the modest growth cycle in the years and slight cuts in the odd was not reversed.