Economic activity fell by more than four percent in the second quarter of the year compared to the same period a year earlier, the INDEC national statistics bureau revealed today.
The 4.2-percent contraction posted by INDEC means that Argentina's GDP shrank by 0.5 percent in the first half of the year in total. Compared to the previous quarter, GDP slumped by 3.9 percent.
Argentina is currently experiencing a financial crisis with soaring inflation and a sharp devaluation of the peso, the national currency, against the dollar.
In its 2019 budget proposal, the government is counting on a reduction in inflation from an estimated 42 percent (45 percent, according to the private sector) this year to just 23 percent next year, while predicting that the economy will shrink two percent in 2018 and 0.5 percent in 2019.
In another concerning economic sign, INDEC confirmed Wednesday that wholesale prices rose by a further 4.9 percent in August compared to the month previous, accumulating a 43.1-percent increase for the year so far. In the last 12 months, wholesale prices have risen by 51.4 percent.
The Economy Ministry said yesterday Argentina's primary fiscal deficit dropped 58 percent compared to the same month last year, falling to 10.35 billion pesos, or US$408 million.