Argentina: President Macri's Recession Kills 82 Companies a Day

The NGO 'Let's Defend Buenos Aires' (DBA) presented on Thursday its Semestral Economic Survey, a study which shows that 2,536 stores closed in the capital of Argentina and the Province of Buenos Aires during Jan. 2019. This means that, as a result of the recession, 82 companies disappeared per day.

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"Many merchants and small entrepreneurs have tried to settle 'crisis committees' and to restructure debts that they can not pay, even renegotiate debts with banks, employees and suppliers and even with service providers. But beyond some specific refinancing, the closing of 2,536 stores in the Federal Capital and the Province of Buenos Aires could not be avoided, "Javier Miglino, DBA director, said.

The survey also obtained information on 34 places in the Province of Buenos Aires. The data showed that 77 businesses were closed only in the City of Diagonal. In other localities such as Lomas de Zamora, Quilmes, Lanus, San Justo, San Martin and Ramos Mejia, hundreds of broken businesses were observed.

With regard to the loss of jobs, Miglino explained that the businesses in Buenos Aires generate direct work for four people, including the owner. Therefore, it can be estimated that some 10,144 people lost their jobs in Jan. 2019 alone.

“Fall of employment. Official data. Between Mar. and Nov. 2018, about 136,000 private quality jobs were lost. In addition, purchasing power fell 13.8% year-on-year in Nov.”

"Between Nov. 2017 and Nov. 2018, for example, some 19,000 jobs disappeared in stores related to construction companies such as plumbing, hardware stores, furniture stores and others."

On the other hand, the National Institute of Statistics and Censuses (INDEC) published on Thusday economic activity indicators, which show that Argentine factories do not use 50 percent of their installed capacity.

This level of industrial idleness means that the economic recession generated during the President Mauricio Macri administration tends to resemble the 2001-2002 crisis.

"In December 2018, the utilization of the installed capacity of the industry fell to 56.6 percent, which means that the factories do not use almost half of their productive potential and they are working at the lowest level since June 2002," Politica Argentina, a local newspaper, stressed.

According to this source, the textile sector is working at less than a third of its capacity (32.3 percent) and the automotive sector works only a quarter of its production potential (25.6 percent), which means that practically 75 percent of the car factories are idle.​​​