La pobreza se desploma en Argentina

Summary

In this video, the impact of Javier Milei's economic policies in Argentina is analyzed, focusing on poverty rates and economic performance. Despite an initial surge in poverty due to necessary fiscal adjustments, recent data suggests significant recovery. The economy grew strongly, unemployment decreased, and real wages rebounded. Independent university estimates align with government figures, showing a dramatic drop in poverty rates by the third quarter of 2024. The summary highlights Milei's success in controlling inflation, reducing public debt, and stabilizing Argentina's economy, despite initial setbacks.

Takeaways

• 😀 The poverty rate in Argentina spiked significantly in the first half of 2024, rising from 41% to 53%, a 12 percentage point increase.
• 😀 Despite the increase in poverty, there were positive economic indicators like inflation, risk country, exchange rate gap, foreign trade, and real wages improving during the same period.
• 😀 The surge in poverty was primarily caused by the sharp decline in real wages, exacerbated by the devaluation of the Argentine peso in early 2024.
• 😀 The drastic reduction in real wages led to an immediate increase in poverty, although the destruction of jobs played a lesser role.
• 😀 The real wages started to recover in the second half of 2024, suggesting that the poverty rate would logically begin to fall as wages and employment levels improved.
• 😀 From July to September 2024, Argentina experienced a strong economic growth of 3.9%, contributing to a reduction in the unemployment rate from 7.6% to 6.9%.
• 😀 The sharpest job losses from the early months of 2024 were reversed by the third quarter, with only a 0.2% decline in employment compared to the same period in 2023.
• 😀 Real wages continued to rise steadily in the latter half of 2024, with private sector formal wages recovering to pre-Miley levels by October.
• 😀 According to estimates from multiple independent sources (including the Ministry of Human Capital, UCA, and UTDT), the poverty rate in Argentina for Q3 2024 fell to approximately 38%, a significant improvement from earlier in the year.
• 😀 While there is skepticism about the accuracy of government-released data, estimates from universities and independent sources align closely, suggesting that poverty had already begun to decrease by late 2024.
• 😀 By comparing the poverty rates between the end of 2023 and 2024, it is evident that under Javier Milei's leadership, the poverty rate was reduced to levels equal to or even below those under previous administrations, despite significant adjustments in fiscal policy.

Q & A

What was the initial impact of Javier Milei's economic policies on Argentina's poverty rate?

At the start of Javier Milei's presidency, the poverty rate in Argentina surged significantly, from 41% to around 53%. This was primarily due to necessary fiscal adjustments, including a devaluation of the peso and austerity measures aimed at stabilizing the economy, which temporarily reduced real wages and caused economic hardship.

What were the main factors contributing to the increase in poverty during the first months of Milei's presidency?

The main factors were the devaluation of the peso, which caused a sharp decline in real wages, and the fiscal austerity measures taken to address Argentina's massive fiscal deficit and inflationary pressures. While there was some job destruction, the most significant contributor to the poverty rise was the reduction in real wages.

How did Argentina's economy perform in the second half of 2024?

In the second half of 2024, Argentina's economy showed robust growth, with a 3.9% quarterly growth between July and September. This growth helped stabilize the labor market, with a reduction in unemployment, and also facilitated a recovery in real wages.

What role did employment and wage growth play in reversing the poverty trend in Argentina?

As the economy grew, employment began to recover, and the real wages in the formal private sector started to rise again, reversing the sharp decline seen earlier. This played a key role in the reduction of poverty, as improved wages and job creation helped lift more people out of poverty.

What is the significance of the 38% poverty rate estimate for Q3 2024?

The 38% poverty rate estimated for the third quarter of 2024 indicates a significant reduction in poverty levels, potentially returning to the levels seen under the previous government. This marks a major improvement compared to the earlier spike in poverty, signaling that Milei's economic policies are starting to have positive effects.

How reliable are the poverty rate estimates provided by the Ministry of Human Capital?

The estimates from the Ministry of Human Capital align closely with those from independent universities, such as the Universidad Católica Argentina and Universidad Torcuato Di Tella, which used the same methodology and data. These independent assessments support the conclusion that poverty in Argentina has significantly decreased in the second half of 2024.

What are the key economic achievements of Javier Milei's government by late 2024?

By late 2024, Milei's government had achieved a range of positive outcomes, including reduced inflation, a more manageable fiscal deficit, lower risk premiums on public debt, a stronger peso, and improved real wages. These achievements have contributed to a more stable and sustainable economic environment.

What does the improvement in Argentina's economic indicators suggest about the effectiveness of Milei's policies?

The improvement in key economic indicators such as inflation, employment, and wages suggests that Milei's policies are beginning to yield positive results. While the country faced short-term challenges, the long-term economic stabilization points to the success of his approach in addressing Argentina's fiscal and macroeconomic imbalances.

Why should critics reconsider their stance on Milei's economic policies despite the early rise in poverty?

Critics should reconsider their stance because the rise in poverty during the early months was a consequence of necessary economic adjustments, such as devaluation and fiscal austerity. As the economy has stabilized and indicators like employment and wages have improved, the long-term outlook suggests that Milei's policies are producing positive results.

How does the poverty rate under Javier Milei compare to that of the previous administration?

The poverty rate under Milei has decreased to levels similar to or slightly lower than those under the previous administration, despite the earlier rise in poverty. The improvement is largely attributed to the stabilization of the economy, including inflation control, a stronger fiscal position, and wage recovery.