MercoPress. South Atlantic News Agency

Province of Buenos Aires' economy contracts under Libertarian policies

The “macroeconomy cannot be stabilized if production is destroyed,” López stressed

Pablo López, the Economy Minister of the Argentine Province of Buenos Aires, a territory larger in size and productivity than many independent countries worldwide, wrote on X that the “macroeconomy cannot be stabilized if production is destroyed.” López, of Argentina's main opposition front, made those remarks after announcing a 4% drop in economic activity in the first two months of the year, for which he blamed President Javier Milei's policies.

“The most affected sectors were industry, commerce, and construction,” which is “a direct consequence of the collapse of more than 70% of public works,” López explained. In this scenario, hundreds or thousands of jobs are at stake as layoffs in federal agencies have become commonplace nationwide under the Libertarian administration in office since Dec. 10.

Technically almost nobody has been sacked but their contracts have not been renewed as it had become customary. For example, a National Meteorological Service (SMN) left his post this week after 20 years of back-to-back contracts.

According to the Construya Index, sales of building materials in the private sector collapsed by 28% in January and February, which equaled the 2020 performance during the Covid-19 pandemic. “Being a labor-intensive activity, employment in the sector is in serious danger,” López argued.

The Argentine Chamber of Construction (Camarco) said Milei's halt on public works would render some 220,000 people redundant. “In addition to the fall in construction, there is a significant drop in key industrial blocks, as is the case of the automotive industry in the Province”; a drop of almost 16% since Milei came to power.

“After 4 years of extraordinary growth, in the first two months of 2024 total production fell [by] 15.8%,” López insisted as his Ministry released the “Productive Data of the Province of Buenos Aires: March 2024” report stating that “During February, the Province of Buenos Aires totaled 26,565 units of vehicles produced,” 12.9% more than in the same month of last year.

The study showed that in the first two months of 2024, 41,503 units were built, which was 15.8% less than in the first two months of 2023. But in February alone only 6,117 units were produced, a 24.1% drop compared to the same month of the previous year. In the first two months of the Libertarian government, the 10,948 units manufactured represented a collapse of 18.1%.

“We are witnessing a worrisome contraction in production levels, which is destructive for employment and real income of the population. Construction and industrial activities are thermometers of our economy and are emitting alarm signals,” López also wrote.