Argentina Economic Outlook
June 14, 2022The economy seemingly moved into a lower gear in Q1. Annual growth in economic activity slowed in the quarter. Moreover, consumer confidence dropped further, while inflation spiked. On top of this, the industrial sector expanded at a weaker pace than in Q4. Turning to Q2, a further deterioration in consumer confidence in April-May, coupled with rising inflation, bodes poorly for household spending and overall activity. Meanwhile, the country recently postponed payments on its over USD 2 billion debt to the Paris Club group until 2024 or until a new framework is agreed. Moreover, the government launched a tender to build a new gas pipeline from the Vaca Muerta shale formation, which could increase transport capacity by 25%, and is encouraging investment in the project. Finally, in order to reduce the fiscal deficit, an 'extraordinary income' tax was announced in June, which should mainly affect the grains industry.
Argentina Economic GrowthThe pace of economic growth looks set to moderate this year due to a tougher base of comparison. Elevated inflation and frail macro fundamentals will restrain domestic demand, weighing on growth. Downbeat investor sentiment amid an unclear policy agenda poses a downside risk. Conversely, a timely implementation of the recent IMF deal poses an upside risk. LatinFocus Consensus panelists see the economy growing 2.9% in 2022, which is up 0.1 percentage points from last month’s estimate, and 1.7% in 2023.
Argentina Economy Data
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Argentina Economic News
January 26, 2023
The monthly indicator for economic activity (EMAE) rose 2.6% year on year in November (October: +4.5% yoy).
January 23, 2023
Merchandise exports fell 7.1% in annual terms in December (November: +15.0% year-on-year).
January 13, 2023
Inflation came in at 94.8% in December, which was up from November’s 92.4%.
January 12, 2023
On 12 January, the Central Bank of Argentina (BCRA) decided to keep the LELIQ rate unchanged at 75.00%.
January 10, 2023
Industrial output rose 1.4% compared to the same month a year earlier in November, which followed October's 3.5% increase.