Drowning by numbers

For decades, the notion that numerical data offers superior clarity over alphabetical information has been challenged. Comedian Michael Bentine explored this theme on The Goon Show, where his newscaster regularly displayed statistics like "832" on a cardboard sign, questioning their significance without providing context. Recently, Argentina's economic situation exemplifies the conflicting messages conveyed through statistics.

On the one hand, Argentina has experienced two consecutive years of growth, with the 2026 Budget forecast projecting a growth rate of 5%. However, there are contrasting figures indicating that the manufacturing industry and construction sectors have contracted by 3% and 4.5% respectively. Additionally, over 31,000 companies have closed, and approximately 330,000 jobs have been lost in both the private and public sectors since President Javier Milei took office. These figures paint a picture of economic uncertainty.

It is important to note that not all sectors in Argentina progress at the same pace. Growth is often considered the primary metric for an economy's success, but even this metric has its complexities. The 2021 growth figure of 10.4% marked a historic record, but this should be viewed as a rebound from the -9.9% contraction of the previous year amid pandemic lockdown measures.

This example raises questions about the reliability of growth statistics, as some have suggested that figures may have been deliberately understated to avoid a double-digit percentage decline.

Furthermore, consumer-led growth often occurs at the expense of inflation, a phenomenon that Argentina has experienced in the past. Chile, for instance, saw a devastating -14% contraction in 1982 due to the elimination of "deadwood" by a military dictatorship, but this period of economic hardship ultimately paved the way for nearly four decades of continuous growth.

In contrast, Milei's administration in Argentina has been criticized for its gradual approach to economic reforms, which some argue is less effective than shock therapy.

Investment data also reveals a discrepancy between the government's rhetoric and actual outcomes. Milei's RIGI incentive scheme for major investments has attracted nearly US$200 million in approved and pipeline projects, a significant sum even with a majority of investments originating domestically from state-owned firms like YPF.

However, much of this investment remains on standby, awaiting the results of upcoming elections. This situation has led to real investment figures falling below those of the previous administration under Alberto Fernández, despite the administration's efforts to create a fiscal surplus.