Economists in Argentina warn that the recession will be worse than first thought. Recent elections have made predictions more bleak.
Alberdi Partners now sees a 3.6% recession, up from their first guess of 2.6%. Other analysts have also raised their predictions to a 3.5% dip.
The restaurant sector shows early signs of struggle. Alejandro Cilley, who co-founded Tea Connection and Green Eat, saw fewer customer visits, reports Bloomberg Linea.
Transactions fell 6% in July and 8% in August.
Pizzeria owners in Buenos Aires face tough choices. With rising costs, they can’t raise pizza prices.
Customer numbers dropped by half after the elections.
Political instability is adding fuel to the fire. Analysts point to the August primaries as a turning point.
The peso lost value, making inflation worse.
Other sectors like hospitality and apparel are now hurting. Before, the impact was mostly on farming due to drought.
People used to wait in lines to dine out, despite high inflation. Even the President noted this trend as positive earlier in the year.
But the scenario is changing, with fewer people eating out now.
Businesses in foreign trade also face hurdles. The government is denying most dollar purchases for shipping.
This causes both delays and unpaid bills among importers.
The negative outlook grows as problems pile up. Political events, a failing economy, and rising costs have dampened hopes.
There’s no quick solution in sight.
Context
Argentina has faced economic issues for years. In 2001, the country went through a major financial crisis.
After some recovery, problems resurfaced in the last decade. High inflation has been a persistent issue.
Public debt also soared, leading to a 2018 bailout from the International Monetary Fund.
Economic policy shifts with each new government, adding to uncertainty. Before the recession, Argentina had a vibrant food and nightlife scene.
The restaurant industry was a major part of the economy. However consumer habits are changing due to the economic downturn.
With information from Bloomberg Linea
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