Argentina Economic Activity July 2018


Argentina: Contraction in economic activity softens considerably in July

September 27, 2018

The monthly indicator for economic activity (EMAE, Estimador Mensual de Actividad Económica) contracted 2.7% in annual terms in July, a much softer drop than the revised 6.8% fall recorded in June (previously reported: -6.7% year-on-year). Although the reading marked the fourth consecutive month of year-on-year contraction, it also represented the first improvement in five months.

July’s contraction came on the back of significant annual declines in agricultural and industrial output, as well as severely restricted trade activity. However, the pace of contraction in the agricultural sector eased significantly, while less negative performances were also recorded in the industrial, trade, transport and communication sectors. Growth in activity in the construction and financial intermediation sectors, meanwhile, gained steam from June, while output in the fishing sector rebounded strongly.

A month-on-month comparison showed that economic activity jumped 1.4% in seasonally-adjusted terms in July, strongly contrasting a 1.3% contraction in June and marking the best result in over three years.

Finally, average economic activity decreased to 1.3% in July from 1.9% in June.

Argentina GDP Forecast

LatinFocus Consensus Forecast analysts see the economy contracting 1.2% this year, down 1.6 percentage points from last month’s forecast, before returning to feeble growth next year at 0.7% in 2019, down 1.2 percentage points from last month’s projection.

Author: Massimo Bassetti, Senior Economist

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Argentina Economic Activity Chart

Argentina Economic Activity July 2018

Note: Year-on-year changes and annual average growth rate of monthly economic activity in %.
Source: Argentina National Statistical Institute (INDEC) and FocusEconomics calculations.

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