The economy of the Argentina, in the years 1950-70, was dominated by a high rate of inflation. Between 1950 and 1966 prices grew at an average annual rate of more than 25%, rarely the rate of increase was less than 10% a year, in 1958 it was 50% in the following year it reached 100%. For the same period, economic development was slow and per capita gross national product (GNP) grew by only 1.3% per year, despite relatively slow population development (1.6% per year), and despite the various stabilization attempts made especially in the period 1962-63, supported by aid provided by the International Monetary Fund (IMF). The military government that assumed power in 1966 launched a new stabilization plan in 1967 which had considerable initial success. in the absence of IMF intervention. The economic policy implemented, which was centered on the short-term control of monetary, credit and wage policy, led to a reduction in the rate of inflation from about 30% in the two-year period 1965-66 to less than 10% in 1969; at the same time, the rate of development of the economy accelerated to around an average of 5.5% per annum. The government also managed to reduce the state deficit from 33% of total expenditure in 1966 to about 14% in 1969. During the 1970s, however, the rate of inflation accelerated again, the cost of living increased to a rate of 20% in 1970, and 30% in 1971.
One of the main causes of the failure of the aforementioned stabilization policy is to be attributed to changes in the price of meat, which began to increase strongly at the end of 1969: between November 1969 and August 1970 the rise was over 30 %, followed by a further jump of 50% in the following six months. The main cause of this rise was the contraction in supply, mainly caused by the policies followed in 1967-68, which had reduced the incentive of farmers to invest. In fact, although, as a preliminary act to the stabilization attempt, the peso had been devalued by 40% in 1967, a decision that would normally have increased both the prices and the incomes collected by the farmers, most of the earnings, if not all, was forfeited by introduction of heavy export taxes. This policy, which contracted exports and contributed to a serious deterioration in the current account of the balance of payments during the stabilization period, was an important factor in the success of the stabilization measures pursued, forcing the supply of livestock to move towards the national market, slowing down the rise in prices for domestic consumers and making wage policy less burdensome for workers. For Argentina economics and business, please check businesscarriers.com.
But the reduction in herds could not continue indefinitely and towards the end of 1969 the cycle began to reverse; breeders began to restrict supply and prices rose.
As for the most recent period, 1975 was a dramatic year for the Argentine economy. During the year, four economic ministers took turns, with different and often conflicting economic policies, which certainly did not help to eliminate the economic disorder and the climate of uncertainty. The balance of payments crisis has also contributed to restricting the room for maneuver of any economic policy. During 1975 inflation was about 20% monthly and about 300% per year (in 1974 it was 35%); the trade balance from active in 1974 became noticeably negative in 1975. The reserves of the Central Bank, which in June 1974 amounted to 2 billion dollars, in March 1976 would have been 785.4 million dollars, of which 168.7 in gold, 298, 7 in loans to international financial organizations and 116.5 in accrued loans. The debt exposure towards Italy was respectively 518.6 and 505 million dollars as at 31 December 1973 and 1974. For 1975 the gross domestic product had an almost zero increase and, for 1976 its growth is estimated around at 4%. The budget deficit, in monetary terms, went from 27,407 million new pesos in 1974 to 139,192 million in 1975, while it is calculated at 370,000 million in 1976. According to official data from the Central Bank of the Argentine Republic, the foreign debt of this country amounted to 8089 million dollars in 1974 (4679 million relating to the public sector and 3409 to the private sector).
On November 3, 1975, the Minister of Agriculture issued measures aimed at maintaining imports on an absolutely necessary basis, tending to reduce the serious deficit, which the balance of payments marked in 1975. A department was created for this purpose. the SECENEI. (Secretariat of the State of Commerce), which must first examine the import requests received. If the total amount of applications does not exceed $ 1200 million, the claims will be approved globally; otherwise, which is very likely, priorities will be made based on the degree of need for applications with respect to the availability of foreign exchange.
On the basis of official ISTAT statistics, the Italo-Argentine trade for Italian imports was, in 1974, of 184.810 million lire and in 1975 of 96.637 million lire; for Italian exports of Lire 53,784 million in 1974 and Lire 74,110 million in 1975. The balance for Italy went from a deficit of Lire -31,026 million to Lire -21,527 million.
