What can we learn from Argentina?

https://twitter.com/x/status/1855943653404889463

Alex

@alex_avoigt

After 11 months of President Milei's government in Argentina, the following results can be reportedPoverty: 53% of the Argentinian population now officially live in poverty, which is a record high. Around a third of this group are no longer able to buy enough calories to survive long term, which means they are starving.Inflation is as high as it was when Milei took office 11 months ago. After he started his reforms, inflation rose from 210% to 292% and is now at 209%, which is no improvement. Monthly sequential inflation has fallen, but 209% annually is no improvement in particular as salaries have gone down in relation. Food inflation is still at 200% in September, the highest in the world.Production: In every single month since Milei took office, production in Argentina has fallen and productivity has declined. There has been less production, not more, since Milei began his reforms, and this is devastating for the country. Argentina's positive trade balance has been achieved by reducing imports while production has fallen as well as exports, and this is a worrying trend.Although it has been clear since Milei was elected in December 2023 that things will get worse before they get better the decline in domestic production, inflation of 209% and lower productivity do not suggest that things are getting better at all. While the IMF has welcomed the spending cuts you can't nutrition your citizens buy spending less long term while productivity goes down. A famine can't be ruled out any more as at this pace it can easily take more than a decade for reforms to have a positive impact.The long-term consequences for the education system and a brain drain will also have long-lasting negative effects. Unless something unexpected happens, the population will probably no longer support Milei's policies in the future.I wish Argentina all the best and a solution, but not only have the last 11 months not helped, but there is also no sign in the data that there will be any significant improvement in the near future.
 
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