Argentina: Economic activity stalls in Q2
September 24, 2014
In Q2, GDP was flat over the same quarter last year, according to data released by the National Statistics Institute (INDEC) on 24 September, which marked the lowest result since Q2 2012. The print contrasted the 0.3% increase tallied in Q1 (previously reported: -0.2% year-on-year). LatinFocus Consensus Forecast panelists had expected a sharp 1.6% contraction, which revived concerns about the reliability of Q2 economic data.
The deterioration seen in Q2 mostly reflected worsening domestic demand, whereas the contribution from the external sector improved marginally. Private consumption recorded its largest decrease since the series began in 2004, declining 2.5% in Q2 (Q1: -1.1% yoy). Public spending accelerated to a 4.3% increase in Q2 (Q1: +3.7% yoy). Gross fixed investment tumbled to a 3.7% drop (Q1: -1.0% yoy).
On the external side of the economy, exports of goods and services contracted 7.4% in annual terms in Q2 (Q1: -6.5% yoy). Imports followed suit and fell 10.5%, which was below the 3.0% contraction tallied in the previous quarter. As a result of the sharp drop in imports, the contribution from the external sector to overall growth improved, swinging from minus 0.4 percentage points in Q1 to plus 0.8 percentage points in Q2.
On a quarter-on-quarter basis, GDP expanded a seasonally-adjusted 0.9%, which contrasted the 0.5% decrease tallied in Q1 and marked the highest print in a year.