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At the beginning of the year, as he inaugurated the Argentine presidency of the G20 with great fanfare, President Mauricio Macri, pondering the importance of the situation, announced: "We are going to drive this G20 with the necessities of people as the main concern […]we will promote consensus for equitable and sustainable development. " Marco Peña, the chef de cabinet, added: "2018 will be better than 2017." Exciting. At the time, the majority (and close to the government) economic discourse was marked by a decided optimism. The results of the new president's paradigm shift (from a controlled and relatively closed economy to a liberalization of all sectors) were taking a long time, but finally "The road was the right one" The currency was rather stable, inflation forecasts for 2018, 15%, very acceptable and those for growth, around 3%, encouraging. The year opened with the promise of a strengthened government. The confidence of the markets towards this newly returned country in the bosom of liberalism would come back, investments raining and this year of presidency of the G20 serve as a launching pad for the triumphal reelection of Mauricio Macri, end 2019. But as a player wisely said baseball of the 60s full of common sense: "It's hard to make predictions, especially about the future."
Vicious spiral
Eleven months later, at the opening of a G20 summit this year, enthusiasm has fallen. After two sharp devaluations, the currency has lost more than half of its value (from 19 pesos for a dollar in January to 39 pesos today). Inflation for 2018 will flirt with 50% and the country is moving into recession. Interest rates, raised to 60%, are the highest in the world. Argentina has entered a vicious spiral that borders on a nightmare or, as Mauricio Macri has recognized in a laconic sentence that has become punchline: "It was fine, and then things happened …" Taken to the throat and without other creditors willing to lend more, Argentina had to resort to the IMF after having slammed the door in the face twelve years ago. First 50 billion dollars (44 billion euros), then seven others in addition raised the indebtedness of Argentina to 93% of its PBI, hovering over the future the shadow of a defect of payment. The austerity measures that traditionally accompany loans from the international financial institution and that aim to reduce the country's public deficit are strangling the population. As in Greece, many retirees had to return to work. But in the face of inflation, which mainly affects commodities and utilities (water, gas and electricity have increased by more than 1,000% since giving up subsidies two years ago), the middle and upper classes people, whose incomes do not follow, see their purchasing power collapse. Today, a couple of Argentines who are both working for a minimum wage can no longer meet basic needs, it is officially poor.
Result : "We have" reprimed "our consumption, says Damian Di Pace, economic analyst. And even the most basic demand goods are down or have been substituted. A striking example: in the first half of the year, milk consumption fell while that of much cheaper infusions increased in as a substitute product. After the second devaluation, the consumption of milk continues to fall, but that of infusions too! " This decline in consumption, combined with an impossibility of financing because of exorbitant interest rates, has a dizzying impact on small and medium-sized enterprises, which form the industrial and commercial fabric of Argentina. In October, for the fifth consecutive month, industrial activity fell by 11%. This year, 100,000 jobs in this sector were destroyed. Sad record, beaten only by the years preceding the terrible crisis of 2001.
Anger and frustration
As for the social consensus announced at the beginning of the year, it is also very far away. Anger and frustration are mounting and demonstrations are being steadily suppressed by a government that seems unable to think of a way out of the crisis. The year 2018, that of the presidency of the G20, supposed to make shine Argentina, ends with a dismal panorama, and no sign of improvement is expected in 2019. The economist and journalist Alejandro Bercovich, with this blackness peculiar to the Argentineans, ironified not long ago: "The only light at the end of the tunnel is the train that will pass us on."
Mathilde Guillaume correspondent in Buenos Aires
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