New prices, old wages: Argentine retail sales down 5.8% in March as recession deepens.
Retail sales in Argentina, Latin America's third-largest market, declined 5.8% in March compared to the same time a year ago. Sales declines were widespread, but were felt most acutely in appliances (-10.2%); building materials (-9.1%); confectioners (-8.4%); hardware (-7.8%); and home furnishings (-6.8%).
According to Osvaldo Cornide, head of the Argentine Medium Business Confederation (CAME), the decline was mainly due to the reduced purchasing power and accelerating inflation rates prevailing since right-wing President Mauricio Macri took office four months ago. Most economic consulting firms estimate that yearly inflation jumped from around 23% in November to 35% currently, and that inflation for all of 2016 may reach 50% before slowing.
"The 'new prices, old wages' effect was very strong in March," Cornide pointed out, "because most workers have not yet received their periodic raises and thus tended to experience sticker shock." Cornide added that the self-employed, who make up nearly 25% of Argentina's work force "were also affected; but as they face low demand, they have not been able to adjust their rates accordingly."
Consumer rights groups, meanwhile, are organizing a national consumer strike for the week between April 4 and 11.
The fall in retail sales deepened from a 4.5% decline registered in February, and 4.2% for the first quarter of 2016. While GDP figures for the first quarter have not yet been released, this trend almost certainly signals a decline in real GDP overall given that private consumption makes up 65% of Argentina's economy.
Private investment, which makes up another 20% of Argentine GDP, most likely declined considerably as well in the first quarter since both steel and cement sales declined 10% in February from the same time a year earlier.
Following pressure from the IMF, last week the Macri administration released long-delayed estimates for GDP which showed that the economy grew 2.1% in 2015. The data, moreover, showed that growth slowed from 3.5% in the third quarter (the last full quarter before he took office) to 0.9% in the fourth quarter, as Macri's austerity and devaluation decrees began to take effect. Macri had made the stagnant economy, which he erroneously described as "not growing in four years," a central campaign theme last year.
At: https://translate.google.com/translate?hl=en&sl=es&u=http://www.infonews.com/nota/286417/por-los-incrementos-de-precios-en-marzo&prev=search
And: http://www.fxstreet.com/analysis/argentina-gdp-growth-slows-down-in-q4/2016/03/31/
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