Argentina: Economy slows in Q2
September 16, 2011
In the second quarter, GDP rose 9.1% over the same period the year before. The reading represented a deceleration compared to the 9.9% increase recorded in the previous quarter, but beat market analysts' expectations of a 7.8% rise. The moderation can be mainly attributed to the external sector's contribution to overall growth compared to the previous quarter. Total consumption added 11.6% over the same quarter of the previous year, up from the 11.1% increase recorded in Q1. Meanwhile, gross fixed investment increased 23.8% in Q2, up from the 19.5% rise in Q1. Meanwhile, exports of goods and services grew 0.5% (Q1: +7.1%), while imports added 24.9% (Q1: +20.4%). Due to the deterioration in exports, the external sector's net contribution to overall growth dropped from minus 1.9 percentage points in Q1 to minus 3.1 percentage points in Q2. At the sector level, the moderation was driven by the agricultural sector, which swung from a 12.2% expansion in Q1 to a 5.4% contraction in the second quarter. Meanwhile, industry expanded 11.3%, up from the 10.9% rise in the first quarter. Finally, services increased 9.8% (Q1: +8.7% yoy). A quarter-on-quarter analysis corroborates the deceleration seen in annual figures, as GDP expanded 2.47% over the previous quarter in seasonally adjusted terms, down from the 3.14% increase registered in the first quarter. The Central Bank sees the economy growing more than 7.5% this year.
Author: Armando Ciccarelli, Head of Data Solutions