JP Morgan warns of Argentina's economic collapse amid record low birth rate

JP Morgan warns of Argentina's economic collapse amid record low birth rate

Investment bank JP Morgan expected a monthly decline in Argentine economic activity of around 1% in July. The actual figure significantly exceeded this forecast, according to the bank itself, and the Argentine peso has hit a new historical low against the dollar. Simultaneously, the country's fertility rate has plummeted to 1.04 children per woman, with the city of Buenos Aires at 0.79 and no province above replacement level. These are the three pillars of a single collapse: economy, currency, and demographics.

What JP Morgan says about Argentine activity

The US bank described the July data as a contraction that far exceeded its forecast of approximately -1% month-on-month, amidst weakness that had already been present since the second quarter. The Argentine economy thus recorded a sharper decline than the entity itself anticipated. This is not an isolated datum: per capita meat consumption fell below 46.3 kilos annually in July, the lowest level in two decades, according to local data.

Added to this is the peso's collapse, which has lost nearly 99.8% of its value since 2013 and reached a new historical minimum against the dollar. The economy has been bi-monetary for years, with everything calculated based on the dollar even when expressed in pesos, yet this has not prevented the local currency from continuing to fall.

Argentine birth rates at Asian levels

The provincial fertility map reveals figures unseen in the region: a national average of 1.04 children per woman, with Jujuy at 0.74 and Misiones topping out at 1.42. The city of Buenos Aires stands at 0.79. No region reaches generational replacement level.

The drop has been vertiginous. Just two years ago, the rate was around 1.5, according to cross-referenced analysis data. Some argue that immigration distorts the picture and that the real rate among native women is even lower. On the other hand, it is argued that 70% of births still come from native Spanish mothers, mitigating the effect of immigration on the global figure.

Cultural factors weigh more than subsidies

Singapore is used as a contrast case: a rate of 0.97 despite having Asia's highest GDP per capita. Public housing is tied to marriage, yet people do not marry until age 32. Among Malays, fertility is 1.5, while Chinese and Tamils are below 1. The conclusion drawn is that money is not the main variable: religion and extended family drive outcomes when subsidies fail.

In the Argentine case, the most repeated explanation is that low birth rates predate Milei. The demographic collapse is not the consequence of a specific fiscal adjustment, but of a longer process inherited by the current government, which no economic policy has reversed.

Milei, the peso, and the shadow of Peronism

The Argentine president has denied the existence of a recession, attributing indicators to claims that "they are throwing up anything," according to collected statements. The most frequent criticism from economic analysts is that Milei has clung to the peso instead of radically dollarizing, and that he is not allowing it to float freely. The result is an exchange rate considered unsustainable in the medium term.

The fourth consecutive fiscal surplus and growth in the new budget are presented as achievements, but the social cost is visible: thousands of SMEs affected, an increase in poverty by some three million people due to the removal of subsidies and aid, and a productive fabric that partly lived off internal consumption. The question remains whether Milei will be re-elected despite all this, backed by external financial support and an electorate that does not want to return to Peronism even if they are suffering.

Gold, reserves, and gambling with liabilities

One of the most commented episodes is the transfer of Argentine gold abroad, allegedly to England, to convert it into an asset for speculation. The circulating calculation suggests that, had it not been touched, that gold would be worth $5.457 billion more today, and that the operation left a profit of $4.434 billion. The interpretation is that, without reserves and with the IMF looming, the metal is pledged to obtain hard dollars; if the metal rises, the lender profits while the country eats the loss upon repurchase.

The error would not be the loss itself, but the absence of a Plan B. When you have zero reserves, you sell your furniture at a loss, and the IMF does not ask for changes, it asks for payment.

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With these elements, the question is not whether Argentina has hit bottom, but how long it takes to rebound. And the disorienting datum is not the peso or the GDP: it is that in Buenos Aires, only 0.79 children are born per woman. No economic policy fixes that in one legislative term.