Economic activity in Argentina fell 1.6% in 2023, reveals INDEC

Economic activity in Argentina dropped 1.6 percent last year with a 4.5 percent contraction in December compared to the last month of 2022 and a drop of 3.1 percent when compared to the previous month, the INDEC statistics bureau informed on Thursday.

The main bright news came from fisheries (up 8.8 percent year-on-year) and agriculture (up 8.1 percent).

The biggest slumps came in the financial sector (down 12.2 percent), manufacturing industry (down 11.9 percent) and wholesale and retail commerce (down 8.5 percent). These three sectors contributed 3.6 percentage points to the 4.5 percent fall.

Last year Argentina was hit by a drought hitting farm exports and slashing three percent off gross domestic product, according to the previous government.

Last January 30 the International Monetary Fund (IMF) downgraded its 2024 forecast for Argentina to negative growth of 2.8 percent, which should be placed within the context of a major austerity drive by the new Javier Milei Presidency to restore macro-economic stability, added the multilateral lender.

President Javier Milei was elected on promises to slash state spending. Since coming to office in December, he has devalued the peso by over 50 percent, cut tens of thousands of public jobs and halved the size of the government.

In January, Argentina reported its first monthly budget surplus in 12 years, while boosting the country's meagre foreign currency reserves from US$21 billion to US$27 billion.

Annual inflation has hit 254 percent.

On Thursday, IMF deputy managing director Gita Gopinath held what she termed an "excellent and substantive meeting" with Milei on "how best to take the country forward," during a two-day visit to the country.

– TIMES/AFP