Argentina's economy shrank 2.6 percent in 2018, the INDEC national statistics bureau reported yesterday,after collapsing seven percent in December year-on-year.
The news confirms the extent of last year's downturn, with the country now officially in recession after two contracting quarters and President Mauricio Macri's plans for re-election under threat.
INDEC's data now shows nine consecutive months of decline, with the annual figure pushed higher thanks to improvements registered in the first quarter of 2018. However, in April began the first of two currency crises that eventually saw the peso drop 50 percent in value against the dollar and the Macri administration heading to the International Monetary Fund (IMF) to seek a US$57-billion loan.
In December, INDEC's estimate of economic activity fell seven percent compared to the same month of 2017, although it grew 0.7 percent compared to November, the preceding month.
Sectors hit hardest in December were commerce (down 16.7 percent), the manufacturing industry (down 14.2 percent) and construction ( down 12.7 percent). In contrast, agriculture and livestock recorded an increase in economic activity of 4.7 percent.
Falling purchasing power
Purchasing power has collapsed in recent months, with inflation continuing to be a pressing concern. Last year, prices rose by 48 percent in the calendar year.
Business projections are not encouraging, either. According to the Survey of Labour Indicators, which began in 2004, only five percent of companies expect to hire new personnel in the next quarter, while 7.8 percent contemplate dismissing employees. In both cases, those are the largest numbers on record.
Amid the downturn, protests are beginning to pick up again in the streets, with many focused on the price increases of public utilities. On Wednesday small agricultural producers gave away 20 tonnes of vegetables in the Plaza de Mayo, in front of the Casa Rosada, in protest at the poor economic outlook and accompanying decreases in consumption.