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Argentina Economic Activity October 2023

Argentina: Economic activity notches quickest growth since March in October

The monthly indicator for economic activity (EMAE) expanded 0.6% year on year in October (September: -0.7% yoy). October’s print marked the best reading since March. The reading reflected a broad-based upturn, with activity in the agriculture, manufacturing and construction sub-sectors all improving in October. Lastly, activity in the hotels and restaurants sector lost steam, while transport and communications production dipped at a steeper pace than in September.

On a monthly basis, economic activity declined 0.1% in October, matching September’s fall. Meanwhile, the trend pointed down, with the annual average variation of economic activity coming in at a two-year low of minus 1.0% in October, down from September’s minus 0.7%.

Commenting on the release, Itaú Unibanco’s Andrés Pérez and Diego Ciongo stated:

“We estimate a GDP contraction of 2.5% for 2024, after a 1.5% decline in 2023. In our view, the expected acceleration of inflation after the recent sharp currency devaluation will hit real wages next year (in particular in 1Q24), while an ambitious stabilization program should support fiscal consolidation efforts yet affect short-term activity dynamics. On the other hand, the normalization of the agriculture sector after a severe drought in 2023 while the positive effects of the announced deregulation of the economy could boost activity over time.”

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