MercoPress. South Atlantic News Agency

Consumption plunges in Argentina despite Milei's optimism

Scientia's document also projects declines ranging from 18% to 20% once the figures for the July 29-Aug. 4 week are released

Consumption in Argentina has dropped below the pandemic and 2001 levels as the South American country's economy continues its erratic behavior under Libertarian President Javier Milei, whose administration depicts a different scenario. A survey conducted by the pollsters Scentia showed the loss of purchasing power and the recession on mass consumption.

Purchases in supermarkets, grocery stores, and small and medium-sized businesses fell 16.1% yoy in July, in addition to the 12.4% drop recorded in June. In the first week of August, consumption is believed to have fallen an additional 21%. The downward streak began in January with a 3.4% drop. Under Mauricio Macri (2015-2019), the deepest fall was 4.5% in July 2016.

Attempts to boost sales through discounts, promotions, and financing have failed to reverse the negative trend. Although slowing down, inflation remains relevant, particularly amid recent increases in fuel and utilities. Things are particularly tough for households in some provinces, it was also reported, with sales plunging between 15.5% and 17.1%, reaching even 24.6% in some cases.

In addition, the increasing prices have led to a reduction in demand from people in neighboring countries who used to do their shopping across the border, thus boosting the activity of local stores.

The decline in consumption spans all categories: food, breakfast and snacks, hygiene, and cosmetics have experienced drops of 9.6%, 12.6%, and 20.9%, respectively. Beverages, both alcoholic and non-alcoholic, are down 25.2% and 23.7%.

In the Buenos Aires Metropolitan Area (AMBA), the Federation of Grocers foresees low activity in the months to come.

Scientia's document also projects declines ranging from 18% to 20% once the figures for the July 29-Aug. 4 week are released.