The start of 2024 brought a flood of bad news for economic activity.
In January, car registrations fell 33.0%, retail sales plummeted 25.5% and construction contracted 28.2% year-on-year, according to data from the consulting firm Invecq.
And as Econviews notes, real wages recorded
a 19% loss in December,
marking the most significant hit to income since October 2017.
With this eating, all economists predict that this year the recession will deepen,
with a fall that would range between 2.4% and 4.4%
, depending on how the main economic variables move in the coming months.
Analysts agree that we are going through the worst moment and show nuances as to
when the debacle will stop.
Econviews sees “
an improvement in the economy starting in May, first incipient and then more robust
.”
“This is conditional on inflation returning to single digits, which would lead to disposable income recovering.”
Even so, activity will decline 2.6% over the year in this forecast.
María Castiglioni, from C&T Consultores, points out that “
there is no recovery seen in either February or March.
In April, the harvest and all related activities, such as transportation and wholesale trade linked to exports, will help.
Surely there will begin to be a turning point, but it will be very uneven.
In domestic consumption, the recovery will be more delayed than in the tradable sectors.”
To accelerate the speed of recovery, the lifting of the stocks will be key, a decisive factor in opening the door to the arrival of investments.
For Castiglioni, “
it does not seem unreasonable that exchange rate unification would occur in the middle of the year
.”
“That can help there be some recovery in the sector that requires investment, such as mining, lithium and Vaca Muerta.”
Fernando Marull, director of FMyA, sees two reasons for the economy to rebound in the coming months.
“Firstly because
of salaries
, which in February tied and in March they begin to beat inflation.
The joint ventures are going to be rearranged to levels above 15% monthly, when inflation is below 15%.”
The second favorable factor that Marull sees is
the arrival of the harvest,
which will begin to be harvested in April and drive exports.
Even so, the economist estimates
a drop in activity of 2.4% for the entire year
.
“The key to the recovery of activity is consumption and exports, investment is more long-term and I still do not see it recovering.”
From Abeceb, Elisabet Bacigalupo suggests that for this year in the midst of the strong adjustment they expect "
a short V scenario: a deep but not very long recession where activity hits a floor in the second quarter
. Between April and May it should begin to reach the floor. Agriculture will act as a buffer, not only for the sector itself but because it spills over into inland towns, in transportation, services and demand for diesel, among others.
But the beneficial effect of agriculture will not be enough to counteract the collapse in domestic demand, which will cause the economy to contract
between 4.1 and 4.3% in 2024
, according to Abeceb's forecast.
And they warn that without agriculture, the fall in GDP would reach 7%.
This scenario assumes that there will be no new disruptive events.
That is to say, the Government manages to avoid a sudden devaluation jump that generates a new inflationary flash.
“
The Government has room to avoid a new jump in the exchange rate
despite the fact that inflation partially erodes it.
What it cannot do is continue to maintain the crawling peg of 2% per month, but the pace can be accelerated without going to a new jump,” reinforces the economist.
Even if this forecast comes true, it will be a bad year for pockets.
“
Salaries will have a hard time recovering, because this recessive cycle began with very low real salary levels
,” says Bacigalupo.
From EcoGo, Sebastián Menescaldi has more reservations about the economic recovery.
“In the first quarter we expect a sharp drop in activity, of 7.5% year-on-year.
In the second there will be mixed results: a much better harvest than last year and the rest of the activity falling.
But we have to see if this rebound is confirmed in the third quarter,
because it will depend on whether the Government manages to stabilize politically and economically.
If you manage to generate expectations, then you can rebuild the level of activity.”
For Menescaldi,
“the exit is going to be much weaker.
V recovery would be miraculous.
There would have to be a lot of capital income that I don't see.
I also don't see that there are dollars to unify the exchange rate.
The Government managed to significantly improve the balance of the Central Bank with the purchases of dollars and liquefaction of the debt in pesos.
But it cannot be unified with US$5 billion of negative reserves and then left to God's will.
We must generate much more confidence or generate a much more important devaluation
.”
Even so, Menescaldi highlights that “in the short term very positive things are being achieved.
Now we must move from an exchange anchor to a fiscal and monetary anchor
.
This could be done without devaluing, but it is complex.
Our decline in activity is
between 3.1% and 4.4%
depending on whether or not there is success with the stabilization of the economy."
For Menescaldi, the dollars contributed by the harvest would not be enough to stabilize the economy.
“There may be some additional contribution from mining, but to have dollars,
the only thing left is to lower imports and that lowers the level of consumption
.”