Argentina Fuel Sales Drop 7.4% in Q1 2024 Amid Gasoline Price Hike

Argentina's fuel sales drop 7.4% due to high inflation and austerity measures, highlighting the economic challenges faced by President Milei's administration.

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Argentina Fuel Sales Drop 7.4% in Q1 2024 Amid Gasoline Price Hike

Argentina Fuel Sales Drop 7.4% in Q1 2024 Amid Gasoline Price Hike

Argentina's fuel sales have dropped by 7.4% nationwide in the first quarter of 2024, largely due to a significant increase in gasoline prices. The decline in fuel sales is part of a broader economic downturn in the country, with factories, small and medium-sized businesses (SMEs), and the manufacturing sector all struggling amid high inflation, shrinking incomes, and austerity measures implemented by President Javier Milei's administration.

Agustín Maza, an economist who provided the fuel sales data, cited specific examples of businesses affected by the economic conditions. An ink factory and a cookie factory have had to reduce production, fire staff, and limit output as a result of the downturn. The International Monetary Fund has forecast Argentina's economy to contract by 2.8% this year before rebounding in 2025.

Why this matters: The drop in fuel sales and the broader economic struggles in Argentina highlight the impact of high inflation and austerity measures on businesses and consumers. The situation emphasizes the challenges faced by President Milei's administration in managing the country's economic crisis.

The austerity measures implemented by President Milei have led to a rise in informal work and a loss of jobs in the public sector. Despite the government recording a budget surplus of about 275 billion pesos (around $309 million) in the first quarter of 2024, the first such surplus since 2008, the measures have faced protests from university students and opposition groups concerned about funding cuts to higher education, research, and science.

President Milei, a self-described 'anarcho-capitalist', has warned that there will be no "way out through public spending", and thousands of public servants have lost their jobs as a result of the austerity measures. The government's actions have aimed to address the country's high inflation, poverty, and declining purchasing power, but the short-term impact on businesses and consumers has been significant, as evidenced by the drop in fuel sales and the broader economic contraction.

Key Takeaways

  • Fuel sales in Argentina dropped 7.4% in Q1 2024 due to rising gas prices.
  • Factories, SMEs, and manufacturing sector struggle amid high inflation and austerity.
  • Argentina's economy forecast to contract 2.8% in 2024 before rebounding in 2025.
  • Austerity measures led to rise in informal work and public sector job losses.
  • Despite budget surplus, austerity faces protests over cuts to education and research.