Argentina: Economy accelerates in Q1
June 27, 2015
In Q1, GDP expanded 1.1% over the same quarter of the previous year, according to data released by the National Statistics Institute (INDEC) on 26 June. The print came in below the 1.2% increase that the markets had expected but marked an improvement over Q4’s revised 0.5% growth (previously estimated: +0.4% year-on-year).
The expansion in Q1 recorded by INDEC was mainly the result of an improvement in domestic demand, while external demand deteriorated over the previous quarter. Private consumption rebounded from a 0.8% drop in Q4 to a 0.8% increase in Q1, thus marking the fastest increase in over a year. In addition, growth in government consumption accelerated from 2.6% in the fourth quarter to 8.0% in the first quarter, which marked the highest reading since Q1 2012. In Q1, fixed investment recorded a mild 0.5% growth, which contrasted Q4’s 8.5% drop.
On the external side of the economy, exports of goods and services contracted 1.4% in annual terms in Q1, which was a more pronounced contraction that the 1.1% fall tallied in Q4. Imports fell 6.1%, which was an improvement over the 18.7% drop seen in the previous quarter. As a result, the contribution from the external sector to overall growth dropped from 3.7 percentage points in Q4 to plus 1.1 percentage points in Q1.
According to sequential data, the economy grew a weak 0.2% in the first quarter, which was slightly down from the revised 0.3% increase seen in the previous quarter (previously reported: 0.0% quarter-on-quarter).
Author: Dirina Mançellari, Senior Economist