Lending further weight to fears that Argentina is heading for a recession, the INDEC national statistics bureau revealed Tuesday that economic activity dropped 5.8 percent in May year on year.
Registering its second straight monthly decline in economic activity, INDEC said the data showed the economy shrank by 1.4 percent in May compared to the previous month of April.
The 5.8-percent figure refers to a comparison against the figure registered May 2017.
The statistics agency said agriculture and livestock were among the most-affected industries contributing to the slowdown. Manufacturing and transportation and communications also retrenched.
In recent months a currency crisis has hit economic growth. President Mauricio Macri's government turned to the International Monetary Fund (IMF) for a US$50-billion financing deal in an attempt to strengthen the economy, with inflation currently in double digits.
President Macri has told Argentines that they will not suffer another economic implosion. But they continue to lose purchasing power to one of the world's highest inflation rates, and many have staged protests against the government's belt-tightening policies, which include lay-offs of government workers and the slashing of subsidies on transportation and utility rates.
"The decline of activity in May reflects not only the adverse weather shock over agricultural production but also the impact of tighter financial conditions over the broader economy," Goldman Sachs economist Alberto Ramos said in a research note. "Overall, we see a very significant risk that the economy will experience a recession in 2018."
Speaking prior to the announcement of the INDEC data, Cabinet Chief Marcos Peña admitted in a brief television interview that "the next few months will be a bit more recessive," conceding that the government may have made "the mistake of underestimating the complexities" of the economy.
"The coming months are going to be a bit more recessive," Peña said, expanding to say that drought had hit the agricultural sector hard, along with other "variables from outside."
The influential Cabinet chief said the coming months will be "a little more stormy and cold with respect to growth."
He admitted: "One of the errors that we most look at is having generated the perception that the road ahead was going to be easier."
Peña also underlined the importance of the support from the IMF and its director, Christine Lagarde. "She strongly supports us," he stressed.