The Economic Crisis And Inflation In Argentina

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The economic crisis and inflation in Argentina

Currently, Argentina is a victim again of an economic crisis: President Macri failed in his attempt to stop inflation. Likewise, prices have historically fired and their interest rates are the highest in the world. In this article, it is intended to analyze the impact that this economic event has had on the territory. Then describe the measures taken by the population. Finally, a conclusion will be developed on the situation in Argentina today. Socio -economic rates and indicators (EPH) – Labor Market.

Unemployment unemployment rate or rate is understood as the part of the Argentine population that, being in age, conditions and willingness to work (active population) does not have a job. This rate has varied during the years in a precipitous way as can be seen in the upper table of the "Labor Market". Consequently, the adverse effects were the increase in interest rates and a strong retraction of consumption. In addition, the economy was contracted 2.6% and an inflation index of 47.6% was recorded.

[Image:] According to INDEC (2019), the unemployment rate was 7.2% during the start of the Macri government in 2017. This percentage has fluctuated during 2018. In that frame, starting 1.The semester of that year, the rate increased by 2%, reaching its highest point in 2.º Semester with 9.6%. On the other hand, Indec reported that Argentina’s GDP fell 6.2% year -on -year in 4.º Semester of 2018, and accumulated a retraction of 2.5% in the year. Histogram of the number of unemployed in Argentina (2015-2018)

According to Clarín (2019), more than 80.000 formal workers who were unemployed requested the insurance or unemployment provision. This is defined as a government program that partially protects workers’ income when they are unemployed. You could say that a national record has been beaten on unemployment insurance charges due to the economic crisis that the Argentine State is going through: the monthly record was 118.268 people.

In November they were granted to 17.953 workers and in December to 17.276, compared to 11.614 in November 2017 and 10.791 In December 2017. This greater demand for unemployment insurance is in line with the increase in unemployment reported by INDEC, raising to 1.750.000. Likewise, the collection period of this state benefit depends on the duration of the worker in his last job: it can be between 2 and 12 months as maximums.

On the other hand, frictional unemployment increases because people do not find employment immediately because of the current situation. In addition, this case is related to a principle of Mankiw’s economy: people respond to incentives (because they will take longer looking for employment).

The Ministry of Production and Labor of Argentina (2019) predicted that the number of workers who will request unemployment insurance will increase. Simultaneously, around 31 will be lost.800 jobs and there will be a decrease of 159.400 employed employees occupied. Currently, the highest employment falls affected the manufacturing industry, commerce, transport and communications, and construction.

All these events in the national economy of Argentina has had a negative impact among the population. This is represented by the unions: associations of workers who negotiate with employers on wages, benefits and working conditions. In this case, Argentine unions have exercised their democratic mechanisms (strikes) to combat against the injustices that the Macri government originates with workers from different national and private companies.

This is because the economic crisis forces to have greater income to be able to face the family basket and different expenses to subsist in Argentina. Likewise, it is recognized that the different national unions are joining in order to fight for the same injustices because it affects the entire Argentine State: 70 unions confirmed their adherence to the general strike convened by the General Workers’ Central on May 29, of May 29,2018 against the policies of the president of Argentina Mauricio Macri. That same day, some guilds and social organizations will accompany the day with popular pots in the streets to “show the hunger” of the town.

In conclusion, Argentina is in the worst economic situation: inflation rises, while economic activity does not stop falling. Clearly, if an evaluation is carried out, without any ideology in between, with precise data of the economy, the result is catastrophic. Unfortunately, this situation is due to the lack of reaction from the Argentine government.

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