This Observatory lists some factors that led to the sector’s decline: first, the recession and tax pressure, which led to the government’s long-awaited zero deficit but turned economic activity and consumption into high-risk activities; in fact, this represented a blow to Argentine domestic industry.

It became clear that the inequalities faced by local factories due to the indiscriminate imports authorized by Economy Minister Luis Caputo primarily affected the SME sector.

Furthermore, the report states that manufacturing SMEs are the most affected by restrictions on demand and access to credit, operating well below the growth rates recorded in the macroeconomy, albeit on a weak foundation.

The Observatory concluded that “the economy is growing, but with fragile foundations: the rebound is explained by the agricultural, oil, and financial sectors, while consumption, industry, and employment continue to lag. Inflation is falling, but has failed to reactivate demand.”

The president of the SME Industrial Observatory, Daniel Rosato, opined that “macroeconomic conditions are important, but insufficient for Argentine factories to compete against foreign companies that enjoy benefits through subsidies, cheap financing, and plans to generate jobs in their countries.”

Rosato warned that now is the time for the government to demonstrate “whether it has a plan for the productive sector or plans to let it die, because the rate of business destruction is alarming.”

abo/jdt/mem/mh