Wednesday, July 17, 2024

ECONOMY | 27-09-2023 13:02

Argentina's economy grew in July despite recession on horizon

Argentina's economy broke a four month streak of decline in July, beating estimates and growing at 2.4%.

Argentina’s economic activity snapped a four-month decline to expand in July, representing a brief respite as South America’s second-largest economy slides into recession.

The economy grew 2.4 percent in July from a month earlier, compared with the 0.9 percent median estimate of economists surveyed by Bloomberg, according to government data published Tuesday. From a year earlier, the economy shrank 1.3 percent, less than the 3.8 percent median estimate of analysts.

Argentina’s gross domestic product slumped 2.8 percent in the second quarter, the deepest decline since the peak of the pandemic in early 2020. A record drought that wiped out US$20 billion of agriculture exports and accelerated food inflation took a heavy toll on the economy while imports rose between April and June, also weighing on growth.

Inflation running at 124 percent and a wide open October presidential election is clouding the economic policy outlook. Libertarian candidate Javier Milei garnered the most votes in a near three-way way tie in an August primary vote and the government devalued the official exchange rate by 18 percent the next day, fueling inflation levels in August not seen in 30 years.

Economists surveyed by the Central Bank see GDP declining three percent this year. 

by Manuela Tobias & Scott Squires, Bloomberg

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