Argentina’s manufacturing sector performed far worse than expected in March, confirming economists’ views that President Javier Milei’s austerity campaign is deepening a looming recession.
Industrial production dropped 21.2 percent in March from a year ago, worse than the 13.5 percent decline forecast by analysts surveyed by Bloomberg. Construction activity also plunged 42 percent in March, its worst annual decline since mid-2020 when the country was in a strict lockdown due to the pandemic. Both indicators fell on a monthly basis too, according to government data published Wednesday.
Economists expect Argentina’s economy to contract 3.5 percent this year with much of the pain concentrated in the first half of the year, according to the Central Bank’s monthly survey published Tuesday.
Beyond the drop in activity, factories are anticipating major lay-offs. Over 73 percent of manufacturing employers expect to reduce headcount in the second quarter this year compared to the same period last year, while only 4.6 percent plan to hire more, while the rest won’t make changes, according to the government figures.
Argentina has lost 48,000 construction jobs from November to February, or 11 percent of total employment in the sector, according to the most recent figures released Wednesday. Milei took office December 10.
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