Argentina: Economic activity drops again in February
The monthly indicator for economic activity (EMAE) fell 3.2% in year-on-year terms in February, which was a less pronounced drop than January’s 4.0% decrease. Looking at the details of the release, the agriculture sector weakened in February, while the manufacturing sector decreased at a softer, albeit still pronounced, rate. Lastly, activity in the hotels and restaurants sector declined at a sharper rate, while transport and communications production dipped at a steeper pace than in January.
On a monthly basis, economic activity fell at a softer rate of 0.2% in February (January: -0.8% mom). Meanwhile, the trend pointed down, with the annual average variation of economic activity coming in at minus 2.3%, down from January’s minus 2.0% reading.
Commenting on the outlook, Itaú Unibanco’s Andrés Pérez and Diego Ciongo stated:
“Our Take: Activity fell in the first two months of the year, affected by the fallout of the stabilization program. We still maintain our GDP growth forecast of -3.0% for 2024, affected by the expected drop in real wages and the sharp fiscal consolidation, but partially offset by the normalization of the agricultural sector after the severe drought in 2023.”