According to the government’s preliminary figures, the Argentine economy grew 2.9 percent in 2017, with numbers set to be officially announced in September. President Mauricio Macri’s administration is hoping that this new year will continue providing what La Nación has denominated ‘the winning combo’ of economic growth and inflation reduction, because if they manage to do so, they’ll reap international trade benefits in the form of lower interest rates for borrowing.
This new preliminary figure comes from the fourth quarter of the previous year, for which figures haven’t been officially released yet. In the first three quarters, the economy grew 2.5 percent, according to the INDEC, and, if the government’s estimates are correct, the fourth quarter will be around 0.7 percent, just under the third quarter’s growth of 0.9 percent.
(For context, GDP tells us the size of an economy, so, consequently, GDP growth tells us how much the economy has grown in a given period of time. It’s because of this that growth can be misleading when comparing numbers to other countries, for example, right now China is growing at a way faster rate than the US, but that’s mainly because they’re starting at a way lower point.)
Similarly and since 2015, Argentina has been growing faster than Brazil, but Brazil’s GDP is still three times the size of Argentina’s. This is not to say that growing numbers aren’t good, but basically to clarify that it’s not just about these few percentage points – you must always look at the big picture.
The INDEC reported that inflation went down from 40 percent in 2016 to 24.8 percent by the end of 2017, which even though is still high, it’s a pretty big deal for a country where inflation has been a big issue since the turn of the century. So, if these numbers are accurate, Macri’s economic team will definitely be patting themselves on the back.
While Argentina’s economy is slowly but surely growing in terms of GDP, the impact on the population is not so simple as to say “the GDP has grown, poverty has ended.” The administration says they’ve reduced the poverty rate and inequality and have increased the employment rate, which certainly sounds like good news, but we’ll just have to see how it impacts everyday life.