{"id":8083,"date":"2024-03-15T16:02:48","date_gmt":"2024-03-15T16:02:48","guid":{"rendered":"https:\/\/milei.ufm.edu\/es\/?page_id=8083"},"modified":"2024-08-27T06:33:27","modified_gmt":"2024-08-27T06:33:27","slug":"macroeconomic-monitor","status":"publish","type":"page","link":"https:\/\/milei.ufm.edu\/en\/macroeconomic-monitor\/","title":{"rendered":"Macroeconomic Monitor"},"content":{"rendered":"\n<h1>\n\t\tMacroeconomic Activity Monitor\n\t<\/h1>\n\t<p>UFM Reform Watch tracks the most recent macroeconomic outcomes of Javier Milei&#8217;s public policy reforms in Argentina. All indicators with their brief description can be viewed below.<\/p>\n<h2>\n\t\tI. Production Indicators\n\t<\/h2>\n\t<p><iframe title=\"Gross domestic product (GDP)\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-7XCCN\" src=\"https:\/\/datawrapper.dwcdn.net\/7XCCN\/1\/\" scrolling=\"no\" frameborder=\"0\" height=\"500\" data-external=\"1\"><\/iframe><\/p>\n\t<h1>The growth challenge &#8230;<\/h1>\n<p>Milei&#8217;s government faces the main challenge of reactivating Argentina&#8217;s economy and reducing inflation (<strong><a href=\"\/en\/currency-monitor\">go to our Currency Monitor<\/a><\/strong>).<\/p>\n<p>The country&#8217;s aggregate production has been stagnant over the last decade, with virtually no growth, which has resulted in a drop in GDP per capita.<\/p>\n<p>Moreover, part of the stabilization program involves rolling back price controls (on the dollar, fuel, private medicine, specific foods and beverages, electricity, water, and transportation rates), all of which might have a negative short-term impact on demand and production. Thus, it is expected that we will see a short-term contraction in the production of the different sectors of the economy.<\/p>\n<p>At the same time, we would expect to see a rebound in activity, as the cost of stabilization &#8220;is being beared,&#8221; the driving forces of private investment begin to appear, and this starts to reignite production.<\/p>\n\t<strong>Manufacturing Industrial Production Index (IPI)<br \/>\n<\/strong>\n<p>The Industrial Production Index (IPI) for Argentina measures the economic activity recorded in the country&#8217;s industrial and manufacturing sector.<\/p>\n<p>It is probably the leading economic activity indicator that best correlates with other broader economic activity indicators such as the GDP.<\/p>\n<p>GDP data is published with a considerable lag, while IPI data is highly timely (released monthly) and published with just over a month&#8217;s delay (versus almost three months ore more in the case of the GDP).<\/p>\n\t<p><iframe title=\"Industrial Production Index (IPI) for Argentina\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-iijJK\" src=\"https:\/\/datawrapper.dwcdn.net\/iijJK\/1\/\" scrolling=\"no\" frameborder=\"0\" height=\"468\" data-external=\"1\"><\/iframe><\/p>\n\t<p><iframe title=\"Monthly Estimate of Argentina&#039;s Economic Activity Index\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-bhfL5\" src=\"https:\/\/datawrapper.dwcdn.net\/bhfL5\/3\/\" scrolling=\"no\" frameborder=\"0\" height=\"483\" data-external=\"1\"><\/iframe><\/p>\n\t<p><strong>Monthly Estimate of Economic Activity (EMAE)<\/strong><\/p>\n<p>The Monthly Estimate of Economic Activity (EMAE) is a leading indicator of economic activity that is broader than the IPI, as it includes additional sectors of the economy.<\/p>\n<p>Its disadvantage is that it takes slightly longer to be published, so it gives us more complete information than the IPI, but somewhat less relevant for decision-making and monitoring Argentina&#8217;s current economic activity.<\/p>\n\t<p><strong>Utilization of Installed Capacity<\/strong><\/p>\n<p>The utilization of installed capacity indicates the degree to which the economy&#8217;s production capacity is operational.<\/p>\n<p>An economy in recession typically sees a drop in the degree of utilization of installed capacity (as a situation prior to the microeconomic adjustment of productive capacity).<\/p>\n<p>An economy in expansion typically sees an increase in the degree of utilization of installed capacity (and also its growth through new accumulation of investment in capital goods).<\/p>\n\t<p><iframe title=\"(Installed) Capacity Utilization in Argentina\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-akMkq\" src=\"https:\/\/datawrapper.dwcdn.net\/akMkq\/2\/\" scrolling=\"no\" frameborder=\"0\" height=\"470\" data-external=\"1\"><\/iframe><\/p>\n\t<p><iframe title=\"Total Export Volume of Argentina\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-xfrxg\" src=\"https:\/\/datawrapper.dwcdn.net\/xfrxg\/2\/\" scrolling=\"no\" frameborder=\"0\" height=\"470\" data-external=\"1\"><\/iframe><\/p>\n\t<h1>Export Volume<\/h1>\n<p>The volume of exports is another indicator of economic activity that tracks the evolution of economic activities aimed at supplying goods and services to international markets.<\/p>\n<p>The indicator excludes the price effect of exports to give a more accurate picture of the real economy&#8217;s performance. A strong export sector often correlates well with increases in the country&#8217;s overall economic activity.<\/p>\n\t<p><strong>Volume of Capital Goods Imports<\/strong><\/p>\n<p>The volume of capital goods imports is a leading indicator of economic activity that informs us of the increase in the future productive capacity of the economy.<\/p>\n<p>An increase in well-invested capital goods in an economy is one of the success recipes for future economic growth.<\/p>\n\t<p><iframe title=\"Volume of Capital Goods Imports in Argentina\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-yMMzJ\" src=\"https:\/\/datawrapper.dwcdn.net\/yMMzJ\/2\/\" scrolling=\"no\" frameborder=\"0\" height=\"485\" data-external=\"1\"><\/iframe><\/p>\n\t<p><strong>Balance of Trade<\/strong><\/p>\n<p>The trade balance is, in a majority of countries, in terms of size, the most important line item of the <strong>Balance of Payments<\/strong> (POB).<\/p>\n<p>The trade balance is the value of all exports minus (-) the value of all imports. When the balance is positive, the inflow of foreign currency through exports surpasses the outflow of foreign curency to pay for imports.<\/p>\n<p>As such, a positive trade balance generally produces a net creditor nation (or, at least, allows for the repayment of past debts caused by past deficit spending). In other words, a trade surplus usually improves the financial position of a country.<\/p>\n\t<p><iframe title=\"Argentina&#039;s Balance of Trade\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-sMBKV\" src=\"https:\/\/datawrapper.dwcdn.net\/sMBKV\/2\/\" scrolling=\"no\" frameborder=\"0\" height=\"468\" data-external=\"1\"><\/iframe><\/p>\n\t<p><iframe title=\"Construction Sector Activity (ISAC) in Argentina\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-KF7wJ\" src=\"https:\/\/datawrapper.dwcdn.net\/KF7wJ\/2\/\" scrolling=\"no\" frameborder=\"0\" height=\"483\" data-external=\"1\"><\/iframe><\/p>\n\t<p><strong>Synthetic Indicator of Construction Activity (ISAC)<\/strong><\/p>\n<p>The Synthetic Indicator of Construction Activity (ISAC) informs us about the progress of activity in the construction sector and sectors related to it.<\/p>\n<p>Construction is a procyclical industry, which usually expands more than the economy in expansionary periods and contracts more than the rest of the economy in recessive periods.<\/p>\n<p>Construction activity is highly influenced by government projects, making it necessary to disaggregate this indicator into the private and public sector (please view our next indicator).<\/p>\n<h2>\n\t\tII. Advanced Activity Indicators\n\t<\/h2>\n\t<p><strong>Monthly Cement Dispatches<\/strong><\/p>\n<p>Argentina&#8217;s monthly dispatches of cement is a leading indicator of construction activity.<\/p>\n<p>Construction is one of the most pro-cyclical sectors of an economy.<\/p>\n<p>Therefore, cement dispatches are one of the key indicators when it comes to anticipating whether an economy is entering a recession or healthy and recovering.<\/p>\n\t<p><iframe title=\"Monthly Cement Dispatches in Argentina\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-R5xDF\" src=\"https:\/\/datawrapper.dwcdn.net\/R5xDF\/1\/\" scrolling=\"no\" frameborder=\"0\" height=\"481\" data-external=\"1\"><\/iframe><\/p>\n\t<p><iframe title=\"Railway Freight in Argentina\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-dwg3L\" src=\"https:\/\/datawrapper.dwcdn.net\/dwg3L\/1\/\" scrolling=\"no\" frameborder=\"0\" height=\"468\" data-external=\"1\"><\/iframe><\/p>\n\t<p><strong>Railway Freight<\/strong><\/p>\n<p>The movement of goods is a broad leading indicator of economic activity. Freight transported by rail can be considered as a proxy for demand for intermediate goods in a variety of sectors, from agriculture to industry and commerce.<\/p>\n<p>Therefore, the increase (decline) in the volume of cargo transported reliably precedes economic activity in the near future.<\/p>\n<h2>\n\t\tIII. Expectations\n\t<\/h2>\n\t<p><strong>Expectations in the Construction Sector<\/strong><\/p>\n<p>The construction sector expectations (ISAC) are derived from a survey conducted among firms in the construction sector.<\/p>\n<p>This indicator provides information on whether the companies themselves expect an increase, maintenance, or decline in public and private construction projects<\/p>\n\t<p><iframe title=\"Expectations on Construction Sector Activity in Argentina\" aria-label=\"Multiple Lines\" id=\"datawrapper-chart-rUyzh\" src=\"https:\/\/datawrapper.dwcdn.net\/rUyzh\/2\/\" scrolling=\"no\" frameborder=\"0\" height=\"645\" data-external=\"1\"><\/iframe><\/p>\n\t<p><strong>Expectations in the Industrial Sector<\/strong><\/p>\n<p>Similarly to the previous indicator, the expectations of the industrial construction sector (ISAC) are derived from a survey conducted among companies in the sector.<\/p>\n<p>This indicator provides information on whether the companies themselves expect an increase, maintenance, or decline in the demand for their products, disaggregated by domestic demand and demand for export.<\/p>\n\t<p><iframe title=\"Expectations on Industrial Sector Activity in Argentina\" aria-label=\"Multiple Lines\" id=\"datawrapper-chart-3DcMD\" src=\"https:\/\/datawrapper.dwcdn.net\/3DcMD\/2\/\" scrolling=\"no\" frameborder=\"0\" height=\"645\" data-external=\"1\"><\/iframe><\/p>\n\n","protected":false},"excerpt":{"rendered":"<p>&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-8083","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Macroeconomic Monitor of Milei | UFM Reform Watch<\/title>\n<meta name=\"description\" content=\"UFM Reform Watch monitors the macroeconomic outcomes of Javier Milei&#039;s policies in Argentina. 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