Argentina’s economy posts sharpest decline in a year in May

Argentina’s economy posted its worst decline in a year in May as the government implemented another strict lockdown and a temporary ban on beef exports cooled the business climate.

Economic activity declined two percent in May from a month earlier, in line with economists’ expectations. It’s the third drop of activity in the past four months. Compared to a year ago, activity rose 13.6 percent, according to government data published Wednesday.

President Alberto Fernández implemented a temporary, strict lockdown in May, which has since loosened, amid a surge in Covid-19 cases and deaths. As beef prices climbed in the beginning of the year, his government also banned beef exports in mid-May, lifting the measure in June after reaching a deal with producers.

Analysts anticipate that the economy will resume its recovery from the pandemic in the third quarter, but growth remains challenged by elevated inflation, high unemployment and uncertainty surrounding midterm elections in November.