The President of the Nation, Javier Milei (La Libertad Avanza), provided this Monday a interview with the British media BBCwhere he referred to several current Argentine economic issues.
Below, a check of some of his phrases.
“If it was the richest country in the world, 140 did it.”
FAKE
In other ocasionsMilei assured that Argentina began the 20th century being the richest country in the world, and that it is currently in position 140.
In order to make a historical comparison of this type, the Maddison seriesthe only one with comparable data for long historical periods, measures each country’s GDP per capita by PPP (an index that weights the values of specific goods in each country to compare the absolute purchasing power of currencies).
According to latest report published by the organization, Argentina began the 20th century in 13th place among 45 countries surveyed (according to GDP per capita measured in Purchasing Power Parity -PPP-) and not in first, as the president said.
Meanwhile, in 2018 (latest data available) Argentina ranked 64th (the country’s GDP per capita PPP was US$ 18.6 thousand) out of 169 countries, while 140th place – which the deputy attributed to our country – was occupied by Tanzania (with a GDP per capita PPP of US$ 2.8 thousand).
However, in 1900 the Maddison base did not have 169 countries on its list but 45. If the comparison is made considering this base of countries, Argentina was ranked number 30 in 2018.
An alternative source that also measures the income of countries is the world Bank. According to the entity’s latest estimate, taking GDP per capita measured in PPP at constant 2017 prices, Argentina was ranked 57th among more than 150 countries in 2022.
“In the last month, salaries began to beat inflation, because they rose 14% and inflation was 11%”
TRUE, BUT
The data mentioned by the president coincide with official information. The report of Average Taxable Remuneration of Stable Workers (RIPTE)prepared by the Ministry of Labor of the Nation, indicated that in March salaries had an increase of 14%, while the INDEC reported that the March inflation was 11%.
According to RIPTE data, in March salaries increased 2.7% in real terms (that is, above the inflation of the month). This data is in line with what Milei pointed out.
However, if you look at a longer period of time, The purchasing power of salaries still remains below the values prior to Milei’s arrival to the Presidency: a is registered real drop of 17% compared to November 2023 and 24% compared to March 2023.
If the INDEC Salary Variation Index (IVS) is considered, as of February 2024 (latest data available) the registered salaries showed a recovery of 1.1% real compared to January.
Like the trend that emerges from the RIPTE analysis, salaries are still below the levels recorded in November, with a drop of 14.6% compared to the last month of the Frente de Todos administration.
Regarding the fiscal adjustment: “Only 0.4% of GDP impacts retirements and pensions”
FAKE
During a National chain issued on April 22, the President had stated that “of the 5 points of the Treasury deficit that we have adjusted, only 0.4% responds to the loss of purchasing power of pensions.”
The reduction of 5 points in the Treasury deficit that Milei mentions coincides with the comparison between the fiscal result for the year 2023 (when a financial deficit of 4.45% of GDP was recorded) and the first quarter of 2024 (when the financial surplus was 0.18% of GDP, according to the official estimates).
Following this comparison, 1 percentage point of this cut of 4.63 percentage points corresponds to the fall in spending on retirement and contributory pensions, and not 0.4% as Milei stated.
In any case, Rafael Flores, economist at the Argentine Association of Budget and Public Financial Administration (ASAP), pointed out Checked that This type of comparison “is methodologically wrong, because there is a temporality in the expenses. For example, in the first quarter, bonuses are not paid, but they appear in the second and fourth quarters. Furthermore, the first one is always the one with the least execution of the entire year.”
In this regard, Gabriel Caamaño Gómez, analyst at the consulting firm Ledesma, https://twitter.com/GabCaamano/status/1782589277634769139 that in the first quarter of 2024 the reduction in spending was 0.6% of GDP, and that the cut to pensions represented 0.22 percentage points (a little more than a third of the total).
The same trend is shown by the projections made by the consulting firm Eco Go for all of 2024 (which arise from annualizing the fiscal result of the first quarter). These show that, compared to a primary surplus of 5.9% of GDP, The adjustment in pensions would contribute 1.9 percentage points (a third of the total).
The phrases contained in this check were searched automatically, and then selected by journalists, through “Chequeabot”the new automation system developed by Chequeado.
