How is it that these actions are yielding opposite results?

[Davidvictorson]

Can someone who understands the Argentine economy explain what is going on there for me. I was excited when the current president won the election. He then set out to carry out some economic reforms. Some of his economic achievements like a budget surplus and decreased inflation have been impressive. But what I do not understand is that some of his policies aimed at slashing government programs and instituting extreme libertarian reforms, is triggering a deep recession and reduction in the purchasing power of the Argentines. How is it that these actions are yielding opposite results? If you understand why this is happening please explain it to me.

[Upgrade00]

My best guess is he needs time. Argentina have suffered decades of terrible leadership applying equally terrible fiscal policies which kept the economy of the country constantly on the decline. Corruption and insecurity have also plagued the country over time. A government no matter how good cannot automatically fix decades of decay in 3 or so months.

We can truly start judging him when the numbers for Q1 and 2 of 2024 start coming in, but even then, the optimism should be kept controlled.

[yhiaali3]

I read a nice article about it entitled "Miley faces the minefield of Argentine economics, politics and society", that can give an idea about the complex problems facing the new Argentine president.

The economic situation in Argentina is complex, and there are years of wrong economic policy that led to economic instability, as annual inflation exceeded the 200% threshold and poverty levels rose to 40%.

Miley's presidency, marked by libertarian principles and capitalist ideals, faces the complex challenge of balancing economic liberalization with societal expectations. Austerity measures and privatization plans were not without opposition, leading to protests and even a general strike. The president's rapid actions, including a 50% devaluation of the peso, cutting subsidies, and dramatically downsizing ministries, reflect his confrontational approach to addressing the government's budget deficit and combating inflation.

Therefore, we can understand that these challenges and problems are difficult for any president to overcome easily and require years of reforms.

[GeorgeJohn]

Can someone who understands the Argentine economy explain what is going on there for me. I was excited when the current president won the election. He then set out to carry out some economic reforms. Some of his economic achievements like a budget surplus and decreased inflation have been impressive. But what I do not understand is that some of his policies aimed at slashing government programs and instituting extreme libertarian reforms, is triggering a deep recession and reduction in the purchasing power of the Argentines. How is it that these actions are yielding opposite results? If you understand why this is happening please explain it to me.

a governance is when you have the interest of your people at heart not being biased or not being focused on only political class to do what that will benefit your country when you happen to imagine as controller of that particular country or region, what I'm trying to say is that if you have objective to your people you will execute it when you have your at mind, their one scripture, I read that says that when good one rule people rejoice, so leadership is very diabolical and dynamic, so you can lead your people base on your propose agenda.

[Churchillvv]

It's just a matter of time, if he is already working on it then it will be resolved sooner than you expect. Just like my country where we have suffered for a very long time now and to change such situations of corruption and inflation it doesn't just come easily it has to do with making policies here and there and hence it will always go the opposite way in the time of implementation.

Because the Argentines have been deep in to this inflation/recession it will take whole lot of jobs to reform the economy or put things in order and the only thing I see wrong is the fact your president (new government) didn't make it clear to y'all that things can't get easy if the don't get hard. So y'all have to bear with him and when the time is due things will begin to change just like here in Nigeria we are beginning to see improvements in price of this recently and that was a result if the hard work of the current government which has promised us good and I believe his working on them gradually.

[Reatim]

When you have a country that was so deep into crisis
and hardships like Argentina, it would be hard to turn
it all around in just a few months. The good thing here
is that it is already starting. We will see changes soon
but not right now and that doesn’t mean the president is
doing a bad job already.

[Don Pedro Dinero]

This is another example of not being clear about the difference between the short term and the long term. Theoretically, the measures that Milei is implementing will have a positive effect on employment and growth, but at least in the medium term.

Right now he is laying off a lot of public employees, therefore less employment and less GDP.

What he wants is in principle to reduce the weight of the public sector in the economy and for the private sector to gain weight, but this will take some time.

And it is not that Argentina's economy before Milei was very buoyant, eh? It was a fucking disaster.

[moneystery]

i don't really know what the actual situation is in argentina, but as far as i understand, argentina's economic problems are very complex and cannot be resolved in a short time. starting from the problem of inflation, soaring interest rates, recession, and high debt to their gdp, these are the major problems facing argentina today. and coupled with the current political turmoil in argentina, it makes the problem even more complicated.

maybe the currently elected president of argentina has a theory that he will apply to argentina's current problems, but that doesn't mean that he can implement it easily, it might be more difficult than it seems and could make the argentine economy even more chaotic. but whatever it is, i am sure that argentina can get through their dark times.

[Helena Yu]

Can someone who understands the Argentine economy explain what is going on there for me. I was excited when the current president won the election. He then set out to carry out some economic reforms. Some of his economic achievements like a budget surplus and decreased inflation have been impressive.

The inflation rate isn't decreased, actually it's keep increase.


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

Budget surplus is just a number, Milei haven't achieve anything when he become president. Budget surplus is either the country has very strong economy or the president don't know how to spend the funds, however Argentine is a third world countries and don't have a strong economy, so you know the answer.

If budget surplus is matter, US wouldn't become the strongest country.

Since 2001, the federal government's budget has run a deficit each year.

[davis196]

Can someone who understands the Argentine economy explain what is going on there for me. I was excited when the current president won the election. He then set out to carry out some economic reforms. Some of his economic achievements like a budget surplus and decreased inflation have been impressive. But what I do not understand is that some of his policies aimed at slashing government programs and instituting extreme libertarian reforms, is triggering a deep recession and reduction in the purchasing power of the Argentines. How is it that these actions are yielding opposite results? If you understand why this is happening please explain it to me.

I'm not the biggest expert on the economy and finance of Argentina, but my theory is pretty simple.
For years Argentina has been living on debts. The government is spending more than it can gather via taxes. Many Argentinians are living on government support. Cutting the government costs would lower the national demand for goods and services, therefore the economy will be facing a short term recession. All the Argentinians living on the government support will become poorer, when the government cuts all the social programs. Argentina must start paying it's debts. That's the main point of the new economical and financial policies.

[God bless u]

Look a country is not like a hose that can be reformed in days or even months. Like you're taking the reforms he made in economical sectors are good but at what costs?

He used the technique to compromise the currency value internationally and to bring down the prices of goods. This will cancel out the effect to some extent of both the reforms done. But the public isn't concerned much about the currency value rather what they care about more is inflation and economical conditions. That's why he had focused more on these two options.

[Maus0728]

I'm not an economist so whatever I infer from the situation, I'm talking out of my behind. From what I can read of the reason why, they probably still do some kind of socialist programs like free college tuition and healthcare and those stuff can get really expensive and so they need more tax for those. Another reason that can be a trigger to this problem is that they're importing more than they're exporting, that's bound to happen to a country because instead of getting more USD to buy more stuff, they're bleeding out of USD due to more imports. Reforms like what's been implemented now don't exactly show results the moment you enforce them, it takes time so maybe we're a little too early to see what's really going to happen.

[btc78]

From what I’ve heard he sees Argentina as a project that can not be completed in a few years time. He said it himself and all throughout his campaign that he has a very detailed vision for Argentina and that it will not be accomplished in just a few years. He is known to basically thinking outside the box and being drastic with his choices so I guess the Argentinian people would need to trust him for a bit before we see if he was really the right choice.

[Cryptomultiplier]

Can someone who understands the Argentine economy explain what is going on there for me. I was excited when the current president won the election. He then set out to carry out some economic reforms. Some of his economic achievements like a budget surplus and decreased inflation have been impressive. But what I do not understand is that some of his policies aimed at slashing government programs and instituting extreme libertarian reforms, is triggering a deep recession and reduction in the purchasing power of the Argentines. How is it that these actions are yielding opposite results? If you understand why this is happening please explain it to me.

I would like to believe that it first gets worse before it gets better, hence why the reforms being enacted have yet to bear the results expected.
Perhaps the reforms would take up from 3months to a year to materialize because I don't think it would happen immediately seeing that it concerns the economy and new administration.

I would like to know if the wages or salary structure was tampered with as to be reduced that one can barely afford much, because it should be a reason why instead of things getting cheaper it becomes still expensive even with the peso being devalued by more than 50%, the amount for state subsidies for fuel and transport being reduced, the number of ministries reduced by half, and scrapping off hundreds of regulations that have cumbered the system.

[Kelward]

From what I’ve heard he sees Argentina as a project that can not be completed in a few years time. He said it himself and all throughout his campaign that he has a very detailed vision for Argentina and that it will not be accomplished in just a few years. He is known to basically thinking outside the box and being drastic with his choices so I guess the Argentinian people would need to trust him for a bit before we see if he was really the right choice.

It's easy to scatter but rebuilding takes a longer time, so if the president of Argentina, told the country's electorates that rebuilding the country will not be a flash in the pan, that it was going to take him years to build their economy to what it ought to be, and they went ahead to vote him into office, that means that they trust him. In this case they have to give him time to perform and make right the wrongs of his predecessors who deflated their economy. There's hope for every country to have a good and vibrant economy, but they need visionary leadership, people with proven integrity that have what it takes to bring desired change.

[WillyAp]

people with interest against the sitting president push for trouble.
People with short term functions in their brains will react instantly.
Wise people know a change in Government needs time, the bigger the issues the more time is needed.
When laying off 500 000 people most of those will demonstrate to get their job back.   

It is not that hard. 

[alastantiger]

I have spoken with some Argentinian friends and most of them support Milei. In the case of Argentina, there is no magic bullet. Under the current policies, the inflation will come down but it will take its toll on the people, thus there is going to be more social unrest. Milei is doing an excellent work in fiscal terms, he is not progressing much in the social situation because he doesn't have legislative majority and the opposition is blocking everything. Most Latin American countries have not adopted to the new world economy such as exportation of technology, they are still stuck in the exportation of commodities. Argentina has a potential for tourism and a retirement destination to bring in the badly needed foreign currency but they have not taken advantage of it the way they should have.

[letteredhub]

In the fourth quarter, agriculture, the country's key industry, was a better performer along with mining and hospitality, while manufacturing, retail, utilities and finance sectors declined. Investment was also down. 

This is a quote from the article as I have read which shows that there are key sectors in the the president economic policies are seeing light, in other words, his policies are yielding progress based on performers level except for many other sector's that no progress is been experienced there but it's to me a common understanding that when new economic policies are developed in a country not all the sectors of the country's economy experience growth simultaneously, some might years to even peak up while some within a medium time.

The recession faced by the Brazilian economy doesn't appear to be one that will stay long all that is needed is time for other major sectors to start experiencing a revival, economic policies are not magical they follow a process to be achieved and in due time it will be achieved but then there will always be a downturn effect before things stabilize. In as much as the agricultural and miming sector is nmin a better performance then there's a chance that other sector's will be affected positively too with time.

[STT]

Its not so surprising, the good effects need to be proven with consistency.  Its pretty much a saying, things are going to have to get worse before they can get better.    A constant budget surplus, repayment of debt properly with value given to bond holders will make the national debt more tradable and lower borrowing costs overall.  To have a cheaper cost of borrowing is a giant benefit, it explains a large part of USA advantages because ultimately Dollar is in demand as the global reserve currency.

The changes in Argentina will yield positive results but its not going to be straight forward.  The single most guiding principle to hold for government is security, stability long term for the entire nation and that has to apply to the currency or you risk losing the entire nation to chaos.   It applies anywhere, I've seen bad budgets in rich countries which have been so unpopular and considered infeasible that the currency base lost within days over 7% value with its trading partners which means everything starts costing more.


If a government only takes actions according to the applause it receives in response they will fail, theres no principle there and harm will occur as markets run circles around policy.   Proper policy requires long term commitment with acceptance of the cost, I dont see this as an Argentina problem but a world problem with giant amounts of debt common in almost every country.

[tabas]

Recovering from all of these years where Argentina has been in trouble with so much high inflation rate as Upgrade said, it takes time. It's not a magic that because he's so good at it, the trouble that they're experiencing economically will remove on an instant. That's not how it goes and even the best leaders in the worlds have their own struggle just to uplift their economical as most of them really depends on what type of government they have. Lowering down the inflation is already a good achievement but the reality of this is that inflation will stick no matter what the president does and his government but, the real magic there is on how they're going to slow it down. But to think that it will be removed entirely, it's never gonna happen. So, base on his new leadership and policies then it will set the results based on how it will impact the entire country together with its foreign relationships and other major industries that the country is in.