ARGENTINA acaba de PUBLICAR su PEOR dato DESDE 2020

Argentina’s worst monthly activity since 2020 quarantine

Argentina has reported its worst monthly economic activity data since the 2020 quarantine: in July, the economy fell 1.4% month over month.

The key point emphasized is that this outcome was far worse than expected. Analysts had projected +1.8% growth, creating roughly a 3+ point gap between forecast and result—prompting immediate negative market reactions.

What’s driving the deterioration (despite “stabilization”)

The commentary argues Argentina’s current hardship is not new. It builds on:

• A long period of stagnation
• A shock beginning when Javier Milei took office in December 2023

A major theme is the quasi-fiscal deficit, and the idea that stabilization was achieved largely through a “liquefy”/devaluation-style adjustment. The claim is that this:

• Eroded the real value of certain debts
• Cut purchasing power for those paid in fixed pesos

The video also notes that stabilization did bring improvements in 2025, including:

• GDP growth of 4.4%
• Higher private consumption (7.9%)
• Investment growth
• A sharp fall in poverty

However, it warns that stability is not free—the economy is still paying structural costs.

The interest-rate shock (July 2025)

A central mechanism blamed for later problems is financial “plumbing,” including changes to how money is managed:

• The Central Bank stopped providing LEFI to banks (described as a nightly “parking” facility for surplus pesos).
• The removal of LEFI is said to have dismantled about 15 trillion pesos—about one-third of the monetary base.
• At the same time, the Treasury required financing, so the interest rate stopped being managed, instead emerging from the conflict between Treasury needs and liquidity.

This is linked to very high interest rates during the run-up to the October elections, and costly borrowing even afterward.

The video highlights that this program period was the first in which real interest rates turned positive—meaning credit is no longer “free” in real terms, which can hurt investment and demand.

Credit boom, then collapse (household stress)

The analysis says credit returned strongly in 2024–2025, with private credit rising from roughly 4% to 12% of GDP.

But when rates increased:

• Household loan delinquency surged from 2.7% (Jan 2025) to 12.1% (Apr 2026)
• The biggest impact fell on mortgages, especially as long-term fixed-rate peso loans emerged and later became stressed when installments rose again

It also frames construction as a key casualty:

• Construction declines are described as ongoing, including year-on-year falls
• These are said to be compounded by reduced public works

Wage and contract dynamics as a hidden cost

Another “almost ignored” factor is labor contract indexation history.

The claim is that:

• Wages are negotiated considering past inflation
• When inflation falls quickly:
  • Labor costs rise in real terms
  • This happens at the same time sales weaken, squeezing firms that also face expensive credit and falling consumption

Consumption and sector-specific outcomes

The video highlights a painful consumer outcome:

• Beef consumption fell 11.5%, reaching a three-decade low

It also argues exports rose because international buyers pay prices that domestic consumers can’t afford.

It further points to misleading growth figures:

• Some sectors (notably fishing, described as surging in a single month) are attributed to base effects
• Conversely, declines are said to be more tied to credit conditions, exchange-rate effects, and household purchasing power

Dutch disease / industry squeeze

Part of the industrial collapse is framed as “Dutch disease”:

• Stabilization and/or a mining boom bring dollar inflows
• Those inflows appreciate the peso
• A stronger peso makes domestic production more expensive than imports
• This harms sectors competing directly with Asian producers, especially:
  • Textiles
  • Clothing
  • Consumer electronics

The video also notes that it’s difficult to separate blame between mining-related peso strength and the exchange-rate channel.

Labor market: unemployment stable, informality rising

The video argues headline unemployment may look steady:

• Around 7.9%, only marginally above the prior year

But it warns the composition worsens:

• Informal employment rises to about 45% of employed people
• Since Nov 2023, registered private salaried jobs have fallen (figures cited in the hundreds of thousands)
• Employment shifts suggest a large share of new work comes from self-employment/freelancing, not formal jobs
• Youth unemployment is especially highlighted—youth are described as the “last hired” when companies stop expanding

Are improvements real, or merely statistical?

The analysis insists stabilization exists, but argues it’s hard to measure cleanly:

• Inflation falls sharply (from about 25.5% monthly to 1.7%)
• Poverty is lower than in late 2023
• “Country risk” improves, reaching its best level in over eight years

However, it also cites a smoothed inflation/real-activity-style series suggesting some months may reflect noise rather than the full picture.

The next major release is expected Oct 21, with the central question being whether costs are temporary or structural.

The main determinants of whether stabilization holds

Three variables are singled out:

1. IMF review and the requirement for a surplus target (~1.5% of GDP), plus the risk that insufficient revenue forces more fiscal contraction while the country is already near presidential succession.
2. 2027 budget assumptions, including growth projections said to be inconsistent with private forecasts.
3. The global interest-rate environment, via the U.S. Federal Reserve, implying financing conditions may not ease soon.

“Stop and Go” warning

Finally, the video argues Argentina is vulnerable to a recurring historical cycle described as “Stop and Go.”

The claim is that after stabilization lowers inflation and restores confidence, the country can lose dollar financing, requiring devaluation and renewed slowing. It argues the “dollar gap” source has shifted from trade imbalances toward financial capital inflows, which can reverse quickly—making stabilization scaffolding fragile if global rates or prices worsen.

Presenters / contributors

• No other presenters are explicitly identified by name in the subtitles.
• The narrator/speaker appears to be a single on-camera/video host (not named in the provided transcript).