Four economic alarm bells sound in Argentina this week

Argentina’s economy received a wave of bad news this week, worsening an already dire economic outlook ahead of presidential elections this year. 

Four key indicators — construction, manufacturing, soy production and city inflation — flashed warning signs. And on February 3, economists surveyed by the Central Bank forecast a brief recession this year, defined by two consecutive quarterly contractions of gross domestic product. 

Here are more details:

Construction 

Construction activity declined on a monthly basis in December for the fifth straight month, according to government data published the INDEC national statistics bureau on Wednesday. On an annual basis, activity also dropped 10.6 percent, the sharpest one-month decline since 2020. On the other hand, construction employment, a lagging indicator, continued to show gains. 

Soy outlook 

Argentine farmers will collect just 34.5 million metric tons of soybeans during the second-quarter harvest, the lowest level since 2009, the Rosario Board of Trade said in a monthly report. That’s down seven percent from January and the lowest estimate yet among traditional forecasters.

Manufacturing

Argentina’s industrial production index declined for the fourth time in six months in December, according to data published Wednesday. About 10 percent of factory employers intend to reduce headcount in the next three months, up from six percent last June, while those intending to hire more fell to 10 percent from 15 percent over the same period. Most plan to make no changes. 

City Inflation 

Prices increased 7.3 percent in Buenos Aires City last month, all but ensuring inflation at the national level accelerated too. The city figures, published Monday, showed prices rose in the capital by 99.4 percent from a year ago. National inflation data is published February 14.