In recent days, more official figures were released that continue to shape the beginning of this 2022. On the one hand, the commercial exchange registered, for February, exports for US$6,443 million and imports for US$5,634 million. In this way, we reached a surplus in the trade balance of US$809 million.
Thus, the interannual variation of exports is 35% (20.4% is explained by price variations and a 12% increase in quantities), being Fuels and energy (+116.4%) and Primary products (+72%) the items with the highest annual increases.
The interannual variation of imports was in the order of 51.7% (18.3% rise in prices and 27.6% in quantities), with Fuels and lubricants being the import item that increased the most since February 2021 (+420.8%). Already with the activity figures, in the fourth quarter of 2021, the GDP was 8.6% higher than a year ago, according to INDEC. Being exports (+23%, year-on-year) and investment (+13%, year-on-year), the components of demand with the greatest increases.
In reference to the previous quarter, the seasonally adjusted series shows an increase of 1.5%, of which the 3.5% increase in investment and the 1.2% contraction in exports stand out. Therefore, the 2021 GDP closed with an annual average rise of 10.3%. In other words, a quick rebound after 9.9% drop of 2020.
Regarding the labor market, in the fourth quarter of 2021, the employment rate stood at 43.6% of the total population. While the unemployment rate was 7% of the PEA (a decrease of 4 percentage points would have been registered, compared to the same quarter of last year).
Analyzing the total number of employed persons, the proportion of wage earners increased with respect to the previous year and stood at 73%. For its part, within the balance of payments (during the fourth quarter of 2021), the current account reached a surplus of US$373 million, while the financial account had a net capital outflow of US$154 million.
Also, the stock of total gross external debt at nominal value reached US$266,740 million (decreased 1.7% annually and 0.8% quarterly). Reduction that is explained by a decrease in the debt of Non-financial corporations, households and non-profit institutions and also registered increases in debt levels from the General Government (which accounts for 60% of liabilities), from the BCRA, and from other financial companies.
The most relevant or descriptive thing may have been the definitive data on the evolution of economic activity during the past year. The recovery of GDP (compared to the 9.9% drop it had suffered in 2020) implies:
- On average, during 2021, the economy was at a lower level -0.6% than in 2019
- even, the particular data of the last quarter of last year show that the economy closed the year at a level somewhat higher than that of the third quarter of 2019
What does this mean? Essentially, that the recovery of economic activity was very fast after having plunged into the quarantine of 2020. And, on the other hand, only few countries in the world experienced such a pronounced drop in activity.
Why or what explains this dynamic? Firstly, investment and public consumption (expenditure without transfers to the private sector) are 16.5% and 8% higher for the same period of comparison. As a second point, private consumption and exports closed last year 3% below the values of the third quarter of 2019.
In other words, there are two groups of components of aggregate demand with opposite dynamics (or at least with different speeds of recovery).
Investment does not seem to be consistent with other variables related to future prospects (although at first glance it can be interpreted differently). The country risk has been maintained for months in high values, punishing the bond market (similar to the price of shares measured in dollars).
Investment seems to be more influenced by controls and exchange rate distortion than by optimism. The exchange market for limited hoarding and the devaluation pressures generated by the exchange rate gap, encourage dollarization through other means such as construction activity and the import of capital goods such as machinery and transport equipment.
All elements that are accounted for in the flow of investments. The growth in public consumption of 8% is a reflection of the increased weight of the State in economic activity. This could be deduced based on partial data and empirical observations.
Beyond the strong growth of income transfers through transitory programs (IFE and ATP and others not so transitory such as the Food Card and Work Enhancement, among others), the negative values of private consumption and exports are the reflection of the drop in purchasing powerof personal and labor income and the lower volumes of goods and services sold to the rest of the world (which are not seen so clearly, in the trade balance, thanks to international prices).
Considering the figures of the evolution of the GDP in recent years, the rates of the labor market can then be understood (unemployment fell from 8.9% in the fourth quarter of 2019 to 7% at the end of last year). This decrease in the unemployment rate It lies in a rate of activity or labor participation that, although it has recovered strongly from the worst moment of the quarantine, is still not found in values such as those of the end of 2019 (fewer people participating in the labor market who could be registering as inactive).
It is also true that the employment rate has grown from 43% of the population, in the fourth quarter of 2019, to 43.6% in the same period of 2021. This would be incontrovertible data about the improvement in employment. Although, when analyzing the composition of this rate, we see that the driver of employment has been the State and not the private sector (the private employment rate went from 35.1% of the population to 35%, that of public employment went from 7.4% to 7.9% of the population in the fourth quarter of 2021).
Federico Pablo Vacalebre is a professor at the University of CEMA
by Federico Pablo Vacalebre
