Argentina: Economic growth falls in Q3
December 29, 2014
In Q3, GDP contracted 0.8% over the same quarter of the previous year, according to data released by the National Statistics Institute (INDEC) on 20 December, which followed a flat reading in Q2. Q3’s contraction marked the lowest growth rate since Q2 2012.
The contraction recorded in Q3 mostly reflected a deterioration in domestic demand, whereas the contribution from the external sector improved. Private consumption hit a record low, decreasing 1.4% in Q3 (Q2: -1.1% year-on-year). Public spending decelerated to a 1.0% increase in Q3 (Q2: +2.1% yoy). Gross fixed investment contracted 4.7%, which was virtually unchanged from the 4.8% decline posted in Q2.
On the external side of the economy, exports of goods and services contracted 8.4% in annual terms in Q2, which was an improvement compared to the 10.5% fall tallied in Q2. Imports fell 15.2%, which was below the already sharp 12.3% contraction registered in Q2. As a result of the relative improvement in exports and the sharp drop in imports, the contribution from the external sector to overall growth improved, rising from plus 0.8 percentage points in Q2 to plus 2.0 percentage points in Q3.
Sequential data confirms the contraction exhibited by the annual figures. GDP decreased a seasonally-adjusted 0.5% compared to the previous quarter, which contrasted the 0.8% increase tallied in Q2. A congressional committee that publishes its own GDP and inflation estimates–amid persistent fears over manipulation of statistics from Argentina’s Statistical Institute–estimated that GDP contracted 1.2% over the previous quarter in Q3 and 2.7% over the same quarter of the previous year.
Author: Cecilia Simkievich, Economist