BUENOS AIRES (Reuters) -Argentina's industrial output plunged 21.2% in March from a year ago, the INDEC statistics agency said on Wednesday, the worst slide since the depths of the COVID-19 pandemic as libertarian President Javier Milei pushes a tough austerity package.
The new government, which inherited an economic crisis with triple-digit inflation when it took over in December, is caught between stabilizing the South American country's wobbly finances and heading off a deep potential recession.
Milei's "chainsaw" cost-cutting program helped achieve rare fiscal surpluses at the start of the year and allowed the central bank to rebuild reserves, but the economy is suffering, with consumption, construction and manufacturing down sharply.
His government, cheered by markets, now needs to get the economic engine going again to avoid a precipitous slide in real incomes, an explosion of already high poverty, unrest breaking out on the streets, and to lure much-needed investment.
INDEC said furniture manufacturing was down over 40% in the month, electronics and tools almost 43%, while metal and machinery products were down nearly 33%. Non-metal minerals and base metals was down some 35%, and cars and transport slid 25%.
The monthly slump was the worst since a 26.2% collapse in May 2020 when the then government shut down large parts of the country in a bid to stem the spread of coronavirus. The pandemic low was a monthly drop of 33% in April the same year.
The INDEC report on Wednesday showed industrial output dropped 6.3% in March versus a month earlier and was down almost 15% in the first quarter of 2024 versus the same period in 2023.