Economic activity shrank 6.9% in September year-on-year

Economic activity in Argentina shrank 6.9 percent year-on-year in September, the INDEC national statistics bureau reported Tuesday, accumulating a fall of 11.9 percent since the turn of the year. 

Argentina’s economy, already in recession since mid-2018, has been battered by the coronavirus pandemic, with the lengthy government-ordered lockdown impacted figures greatly. 

Nevertheless, INDEC’s data indicated that the local economy grew 1.9 percent in September from the previous month, as restrictions on businesses and the movement of people were loosened, a fact highlighted by the Economy Ministry in a later statement, which stressed that it was “fifth consecutive monthly rise” of activity,”

According to INDEC’s data, six of the 15 sectors recorded growth, led by commerce and industry.

Negative data was recorded for sectors including transport and communications (down 19 percent) and community, social and personal service activities (down 50 percent).

The latest Central Bank survey of private economists forecast that gross domestic product (GDP) will contract by 11.6 percent in 2020. The International Monetary Fund has predicted a similar figure of 11.8 percent.

"We expect real GDP to decline by more than 10 percent this year, just below the drop recorded in 2002," wrote Tiago Severo, an analyst at Goldman Sachs Group Inc., in a research note to investors on Tuesday.

In October, exports, a key source of much-needed dollars for Argentina, fell 21.6 percent from the previous year, reflecting the first full month that exporters had to deal with currency controls implemented in mid-September. Meanwhile, imports only fell 2.8 percent in October. Argentina's monthly trade surplus has more than halved in the last three months, from US$1.4 billion to US$612 million.

Enduring a third consecutive year of recession, the country's unemployment rate currently stands at just over 10 percent, with  inflation close to 40 percent.

To date, Argentina has recorded 1.4 million confirmed cases of Covid-19, with more than 37,000 fatalities. 

– TIMES/AFP/NA