Argentina: Economic activity loses momentum in July
Latest reading: Economic activity increased 2.9% on a year-on-year basis in July, following a 6.1% increase in the prior month.
Relative to the prior month’s figures, readings in July softened for agriculture (+0.7% in annual terms vs +4.2% in June), manufacturing (-1.8% vs +7.7% in June), construction (+3.0% vs +9.2% in June) and hotels and restaurants (+5.9% vs +16.2% in June). In contrast, the reading for transport and communications improved in July (+1.5% vs +1.1% in June).
In month-on-month terms, economic activity was down 0.1% in July, following a 0.6% drop in the prior month. The economy has now contracted for five of the first seven months of the year, leaving total GDP smaller than its February peak.
Panelist insight: On the outlook, Goldman Sachs’ Sergio Armella said:
“The weakness will likely persist through the final two months of the third quarter. Tighter domestic financial conditions since mid-July, rising political and policy uncertainty ahead of the October midterm election, and softer sentiment will weigh on growth. We expect the economy to return to a positive growth trend in the fourth quarter.”