Buenos Aires Times

economy EMPLOYMENT CRISIS

Rise in unemployment headlines INDEC’s economic indicators

Unemployment rose in the second quarter of 2018 to 9.6 percent – the highest figure in 12 years, according to local outlets.

Saturday 22 September, 2018
Job data are a complex issue in Argentina given that around 30 percent of the nation’s workers are paid ‘under the table’.
Job data are a complex issue in Argentina given that around 30 percent of the nation’s workers are paid ‘under the table’. Foto:Perfil-File

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The figure stood at 8.7 percent in the same quarter last year. Applied to the population, that would equate to 1,998,387 people, or almost two million people currently without a job, La Nación reported.

The data, reported by the INDEC national statistics bureau and drawn from 31 of the most important urban centres in the country, is an increase of almost one percentage point on the same period the year previous and a rise of 0.5 points from the previous quarter. In the six months of the year, jobless figures have now risen by 2.4 percent.

In its report, INDEC reported in the year-on-year comparison that “there is a statistically significant increase in unemployment and activity rates with respect to the second quarter of 2017.”

The two sectors of the economy that produce the most jobs, manufacturing and domestic trade, registered falls in activity of 1.8 percent and 1.6 percent year-on-year.

The statistics bureau said that underemployment, people who seek to work more hours and do not find them, stood at 11.2 percent in the second quarter, 0.2 percent higher than the figure from the same period of 2017.

ECONOMIC ACTIVITY DOWN 4.2%

The news comes hot on the heels of another piece of INDEC data, which revealed yesterday that economic activity fell by more than four percent in the second quarter of the year, compared to the same period a year earlier. It was the steepest year-on-year decline since 2014.

The 4.2-percent contraction means Argentina’s GDP has shrank by 0.5 percent in the first half of the year in total. Compared to the previous quarter, it slumped by 3.9 percent.

Argentina is currently experiencing a financial crisis with soaring inflation and a sharp devaluation of the peso, the national currency, against the dollar. The government has warned of a “long and painful” recession.

Nearly half of all Argentines foresee a “worse” economic future for their children, a new Pew Research Center study has found.

In its 2019 budget proposal, the government is counting on a reduction in inflation from an estimated 42 percent (45 percent, according to the private sector) this year to just 23 percent next year, while predicting that the economy will shrink two percent in 2018 and 0.5 percent in 2019.

On increases, INDEC confirmed Wednesday that wholesale prices rose by a further 4.9 percent in August compared to the month previous, accumulating a 43.1-percent increase for the year so far. In the last 12 months, wholesale prices have risen by 51.4 percent.

OECD WARNING

Providing a global context, the Organisation for Economic Cooperation and Development (OECD) warned Thursday that global expansion is likely to slow as tensions kickstarted by US President Donald Trump’s protectionist policies hit world trade, the said today.

“Global GDP growth remained solid in the first half of 2018, at around 3.75 percent, but there are signs that the expansion may have now peaked,” the OECD said in a new report.

The organisation said it now expected growth to settle at 3.7 percent in 2018 and 2019, down 0.1 and 0.2 points respectively from its May projections.

Among the factors hurting growth are slowing trade expansion, which slipped from five percent in 2017 to around three percent in the first half of 2018, the report said.

The drop comes as Trump’s “America First” approach has brought trade conflicts with China, the world’s second largest economy, while also raising the pressure on its European trading partners.

The OECD report warned that the trade tensions are leading to a rise in uncertainty that is hurting both advanced and emerging market economies. The report expressed particular concern about nations whose currencies have collapsed in recent months.

According to its projections, the OECD expects Argentina’s economy to contract 1.9 percent this year.

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