Argentina: GDP growth improves in Q2
GDP growth gathered momentum to 6.9% year on year in the second quarter, from 6.0% in the first quarter.
Fixed investment growth improved to 18.8% in Q2, from a 10.6% increase in the prior quarter. Public spending accelerated to a 5.3% increase in Q2 (Q1: +5.0% yoy). Meanwhile, private consumption growth eased to 10.7% yoy in Q2 compared to a 10.9% expansion in Q1, due to souring consumer sentiment and elevated inflation.
Growth in exports of goods and services sped up to 9.3% in Q2 (Q1: +8.9% yoy). Conversely, imports of goods and services growth moderated to 23.1% in Q2 (Q1: +26.8% yoy).
On a seasonally adjusted quarter-on-quarter basis, economic growth edged down to 1.0% in Q2, compared to the previous period’s 1.2% growth. Q2’s reading marked the slowest expansion since Q2 2021.
Activity is expected to cool in H2, as downbeat consumer sentiment coupled with a further spike in inflation hit private consumption. Moreover, political uncertainty will restrain private sector activity. That said, a timely implementation of the recent IMF deal poses an upside risk.