Argentina: Economy grows strongly in Q2 on low base effect
GDP growth gathered significant momentum in the second quarter, accelerating to 17.9% year-on-year from 2.9% in the first quarter, benefiting from a favorable base effect.
The upturn mainly reflected a marked improvement in domestic demand. Private consumption rebounded, growing 21.9% year-on-year in Q2 following a 1.7% contraction in Q1. Government consumption also bounced back, growing 8.2% in Q2 (Q1: -0.1% yoy). Fixed investment growth, meanwhile, sped up to 76.6% in Q2 from 38.7% in the prior quarter, driven by the construction sector.
On the external front, exports of goods and services bounced back, growing 6.3% year-on-year in the second quarter (Q1: -9.9% yoy). Meanwhile, growth in imports of goods and services sped up to 36.6% in Q2 (Q1: +4.9% yoy), marking the best reading since Q3 2010.
On a seasonally-adjusted quarter-on-quarter basis, however, economic activity declined 1.4% in Q2, contrasting the previous period’s 2.8% expansion, amid stricter Covid-19 restrictions.