Economy grew 6.3% in the first half of 2022, says INDEC

Argentina's economy unexpectedly expanded in June before a political crisis in July sent prices soaring to a 30-year high.

Economic activity increased 6.4 percent year-on-year in June, the INDEC national statistics bureau said Tuesday.

The figure, produced by the bureau’s estimate of activity, means that Argentina’s economy grew 6.3 percent in the first half of 2022 when compared to the previous year. 

Compared to the previous month however, the economy grew 1.1 percent in the indicator, which is seasonally adjusted, well above economists' expectations of a 0.2 percent decline. 

In June, economic activity was driven by the wholesale trade, retail and repairs (+ 8.4 percent compared with the same month in 2021), manufacturing (+ 6.2 percent), and transport and communications (+ 10.8 percent) sectors, which together contributed three percentage points to the increase in the total index, INDEC noted.

The fastest-growing sectors were hotels and restaurants (+ 39.2 percent compared with June 2021) and mining and quarrying (+ 14.2 percent).

While the economy was resilient in the first half of the year, analysts in the Central Bank’s monthly survey now forecast that Argentina will enter a brief recession with contractions in the third and fourth quarters. Annual growth will be around 3.4 percent, they said.

According to the most recent forecast by the International Monetary Fund, Argentina’s gross domestic product will increase by four percent this year.

– TIMES/AFP/BLOOMBERG