Argentina has been grappling with economic challenges
for many years now, however recent developments could bring
significant changes – the assumption of Javier Milei as president in
December. This transition comes at a crucial time when Argentina faces
a fragile economy and deteriorating social conditions.
One of the key concerns amongst society is
inflation, set to soar up to 175% in 2024. President Milei wasted no
time in addressing this issue, unveiling an ambitious agenda of
reforms aimed at fostering a less regulated, market–friendly economy
with a robust private sector driving growth.
Early actions under the new administration
included a 120% increase in the exchange rate in December 2023 and
adjustments in regulated prices like transportation and utilities.
While these measures are expected to keep inflation rates high in
the initial months of 2024, a slowdown is expected in the second
half of the year.
Against the backdrop of these economic
fluctuations, Argentina’s IT distribution sector stands as an example
of resilience. The CONTEXT team has been building a robust IT
distribution panel, comprising 15 major players covering 80% of the
market. Despite the economic challenges, the panel remains a key
component of Argentina’s tech landscape.
Analysing sales figures from the first quarter of
2024, CONTEXT notes a dramatic 60% decline compared to the previous
year, reflective of the recessionary environment.
Both volume and value markets show a downturn,
with a slight uptick in recent months. Categories such as mobile
computing, computing components, and displays witness consistent
underperformance, while others like printing, networking systems, and
server computers exhibit a modest upward trend despite the overall
economic downturn.
However, there does seem to be a glimmer of hope.
Feedback from the channel indicates optimism for the second half of
the year, despite the prevailing challenges.
Distributors, while currently adopting a cautious
selling approach, are gearing up for a shift towards aggressive sales
strategies featuring high volumes and low margins, anticipating a
turnaround in the economic landscape.
Argentina’s journey through economic turbulence
continues, with Milei’s reforms are aiming to steer the nation towards
stability and growth. As the country navigates these challenges, the
resilience of the IT distribution sector serves as a testament to
Argentina’s spirit and determination to overcome adversity.
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