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ECONOMY | 29-05-2024 13:14

Recession hits Argentina's SMEs hardest: 7 out of 10 report falling consumption

Argentina’s deepening recession is hitting the nation’s small- and medium-sized businesses (SMEs or PyMEs) the hardest, according to a new report.

Argentina’s deepening recession is hitting the nation’s small- and medium-sized businesses (SMEs or PyMEs) the hardest: according to a new report, seven out of 10 reporting falling consumption.

The survey, conducted by the Industriales Pymes Argentinos (IPA) and consulting its members, saw nearly 70 percent of industrial SMEs respond that they are facing a crisis due to the collapse of consumption in the domestic market.

Of those polled, 31 percent of SMEs described their situation as “very bad,” with 38 percent concluding it is “bad.”

Pessimism is running high, the poll showed. Some 55 percent of manufacturing SMEs also expect the situation to worsen in the next 12 months, rather than improve. Only 21 percent expected conditions to improve over the next year.

The depth of the crisis is beginning to affect employment, according to IPA’s members, with heavy lay-offs in the textile sector. Some 35 percent say they are assessing dismissals and redundancies.

SMEs are closely watching the policies introduced by President Javier Milei’s government, with 62 percent saying their evolution depended on economic policy. 

Seventy percent said that falling domestic demand was the worst problem facing the sector.

Around 48 percent of respondents said a high tax burden was damaging their growth, while 39 percent attributed the crisis to “uncertainty in terms of economic policy.”

 

– TIMES/NA

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