Last year, the economy grew by around 5% and there was a strong expansion in consumption, despite the fact that purchasing power fell due to rising inflation.
For this year, projections indicate that
the economy is at risk of stagnating
, job creation will slow down and consumption will cool down.
A report by the consulting firm Equilibra states that in 2022, economic activity expanded by more than 5% per year and had private consumption as one of its most dynamic components, with an increase of more than 9%
This occurred despite the fact that the formal salary fell -slightly- in real terms and thus
accumulates five years without growing.
If purchasing power deteriorated, what was it that drove private consumption?
"the answer is employment"
Last year the number of registered wage earners climbed 4%, the number of informal wage earners rose more than 15% and non-salaried employed around 1%.
The consultant details that taking into account all types of employment,
total jobs would have grown 6% in 2022.
Formal and non-salaried salaried positions expanded 3% annually and informal ones 13%.
The recovery of employment is very significant:
jobs adjusted for population growth are 1% higher than those of 2017, the year in which private consumption peaked. In addition, there was a double change in the composition of employment moving towards greater "independence" and, within the salaried world, towards greater informality", explains Equilibra.
This employment growth compensated for the loss of purchasing power and allowed consumption to grow despite the fact that wages lose due to the rise in prices.
The mass of labor income (paid job) grew 4.6% in real terms in 2022.
This number contrasts with the fall in real wages and explains the strong expansion of private consumption," says Equilibra.
"Last year the propensity to consume or to dissave in families increased."
That dynamic will be cut this year.
"By 2023 we expect a slowdown in employment and that wages slow down inflation.
In order for private consumption not to stagnate, we would have to resort to other drivers: soft loans, use of savings or transfers from the treasury, read "electoral push".
Other surveys already show that consumption is slowing down.
The Consumption Indicator (CI) of the Argentine Chamber of Commerce (CAC) showed
a seasonally adjusted fall of 0.3% in January compared to December
(that is, discounting the usual seasonal effects of consumption throughout the year).
Although in January consumption showed an advance of 5.5% in relation to the same month of 2022, it failed to match the values prior to the pandemic: it is
located 0.3% below compared to January 2019.
This year "a new drop in the purchasing power of households is expected
as a result of the lack of economic dynamism,
inflation that would remain at high levels and a rate recomposition process that is still underway," according to the report. of the ACC.
In the City they do not believe that it is possible for Massa to reach the inflation target of 60% this year
Around the world, inflation rose again in January, but in Argentina the jump was greater