The national industry is facing significant challenges, with the manufacturing production index indicating that 2023 was one of the worst years in almost a decade. Only three months in 2019 and two in 2020 recorded lower records than the average drop of 12.8% in December 2023. This decline has had a significant impact on factory activities, with agricultural machinery, steel, electrical equipment, appliances, and base metals all seeing substantial decreases.
The food and drink production sector was also affected, with significant drops in sectors such as beef and oilseed grinding. These declines indicate that the industry has been struggling for some time, reflecting low-quality jobs and unproductive salaries. Informal employment without labor or social coverage has reached around 47% of existing employment in the country.
The construction statistics also show a bleak outlook, with a drop of 12.2% in December 2023. Business expectations on employment, hours worked, and GDP all indicate a lack of optimism in the industrial sector. Retail sales figures also indicate a decline, with an average drop of 28.5% in January compared to January of the previous year.
The Central Bank’s survey predicts that it will take until July for the price index to return to single-digit numbers, indicating high levels of inflation. The overall picture is one of stagnation and large-scale inflation, known as stagflation. This has created uncertainties and had a significant impact on vulnerable social sectors.
The lack of a clear plan to address stagnation and inflation has raised concerns about the government’s approach to economic challenges. Some see commitments to achieve balance in public accounts and end inflationary financing of the Central Bank as positive steps towards addressing these issues. However, others question their impact on provincial subsidies for public transportation and their effect on low-income individuals with unstable jobs.
Ultimately, it is clear that significant challenges lie ahead for both the national industry and wider economy