Despite pro-business reforms, Argentina's factory owners struggle
By Anthony Esposito
BUENOS AIRES, June 2 (Reuters) - Since taking office in December, President Mauricio Macri has quickly ticked off a long-held wish-list of Argentina's manufacturers - lifting tough capital controls, easing import restrictions and freeing up access to dollars.
But his policies have yet to lead to a recovery in manufacturing. Initial optimism over the new business-friendly government has met the tough realities of stubbornly high inflation, an economy stumbling towards recession and job losses.
"We were selling around 28,000 pairs (of shoes) per month and then in October last year it suddenly dropped to 18,000. We thought it would only last a few months, but the situation still hasn't changed," said Jorge Boris, vice-president and partner at security footwear maker Boris Hnos, which makes steel-toe shoes used in construction and other industries.
The shoemaker, which employs around 70 workers on the outskirts of Buenos Aires, is not alone. Industrial output contracted a sharper-than-expected 6.7 percent in April from a year earlier, the newly revamped Indec statistics agency said this week.
Boosting factory output and turning around Argentina's economic fortunes are key to Macri's political fortunes.
He has promised to reverse years of protectionist economic policies under his leftist predecessor Cristina Fernandez but he could face labor unrest and an aggressive opposition in Congress and on the streets if he cannot quickly deliver growth.
"Up until now we haven't seen a change with this government ... The economic situation in the country is bad. People have less purchasing power and companies are also doing poorly," said Boris.
Macri's policies have been hailed by investors as a strong start to opening up the economy, but they have also swelled the ranks of the poor as a currency devaluation sparked a sharp hike in inflation and the government hiked utility rates and cut generous subsidies for gas and water. Continuación...