this video is brought to you by nebula it's now been just over a year since Argentinian president Javier M took office and well things are going pretty great for him he successfully flipped both Argentina's trade and fiscal deficits allowing Argentina to run consecutive primary surpluses for the first time in ages inflation has come down from its head highs allowing the central bank to finally cut interest rates and hopefully Paving the way for the v-shaped recovery that melee has long promised but perhaps most impressively M's approv rating has actually gone up in the past few months with the latest morning conert polling giving him an astonishing net approval rating of plus 37 so in this video we're going to take another look at melee's presidency and ask whether his apparent success could be replicated [Music] elsewhere so let's start with a quick recap as regular viewers probably already know melee came to power a year ago promising to take a proverbial chainsaw to the state in an attempt to balance the budget and bring macroeconomic stability within just a few weeks he had abolished 10 of Argentina's 18 government Ministries halted the vast majority of public infrastructure projects and dramatically cut fiscal transfers to provincial governments he also devalued Argentina's currency the peso by 50% and then implemented what's known as a crawling Peg whereby its value continued to Fall by 2% each month as part of an attempt to bring its official value closer to its market rate this was both to simplify Argentina's his currency regime thereby facilitating more investment and to force Argentinian households and businesses to import less these policies had two immediate consequences the first was a dramatic decrease in GDP with Argentina's economy shrinking by about 3. 5% this year because cuts to government spending meant the Argentinian households had less cash to spend this also triggered a dramatic increase in poverty with a relative poverty rate rising from 40% to 53% Second there was a spike in inflation thanks to the depreciation of the pesel month-on-month inflation jumped from 12. 8% in November 2023 to an all-time high of 25.
5% in December 2023 M's first month in charge for context this would translate to a year-on-year rate which is usually how inflation is measured of about 1, 1400% now this was unsurprising and melee did warn the electorate that his policies would entail some economic turmoil but this really was quite an upheaval while M's approval ratings stayed in ly high with most pollsters putting him above 50% a couple of months ago there was a sense that their patience was waning somewhat his approval ratings were ticking down slightly inflation was stubbornly high and the recession was deepening however in the past few months things have started looking up month-on-month inflation has fallen from a peak of 25% last December down to about 3% for the past few months this is obviously High by International standards but it's low by Argentinian standards and perhaps more importantly it's it's lower than Argentina's average wage growth Argentinian wages are currently growing by about 6% which means in real terms that wages are growing at about 2 or 3% month on month their fastest rate in quite some time the relative poverty rate has also fallen from its recent Peak going from 53% in June to 49% in October in November low inflation allowed the central bank to lower its Benchmark rate for the first time in nearly 6 months from 40% to 35% there are also some tentatives science that the economy is rebalancing towards investment and exports as melee had hoped for context GDP is usually defined as the sum of four things domestic consumption government spending investment and net exports I. E your exports minus your Imports melee believes that Argentina's GDP involves too much consumption and government spending and hopes that the coming recovery will be driven more by investment and exports and well it looks like this is sort of happening in the first 7 months of 202 4 the latest period for which we have data exports reached $ 45. 4 billion an increase of 14.
8% on the same period last year while Imports total just $ 33. 1 billion a decrease of 25. 9% year- on-year in the aggregate this means that Argentina ran a 12.
3 billion Trade Surplus in this time compared to a $5.
