Argentina’s economy contracted in May for the third time this year as previous wage declines and rising unemployment likely put pressure on consumer spending.
Economic activity fell 0.1 percent from April, below economists’ projections for growth of the same scale, while April’s positive figure was revised down slightly. From a year ago, the economy expanded five percent, according to government statistics published Monday.
The drop in May activity aligns with a consumer spending setback in recent months as wages adjusted for inflation fell into negative territory earlier in the year. Despite Argentina’s agriculture harvest driving exports and sharp growth in oil fields, the consumer outlook remains fragile after unemployment in the first quarter reached its highest level in nearly four years.
In June, economists trimmed their growth forecast for the year to five percent after steadily increasing in previous months, according to the Central Bank’s most recent monthly survey.
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by Patrick Gillespie, Bloomberg
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