Argentina: GDP growth moderates in Q3 on fading base effect
Economic growth lost steam in the third quarter, with GDP expanding 11.9% on an annual basis (Q2: +17.9% year-on-year).
Household spending increased 12.1% in the third quarter, which was below the second quarter’s 20.4% expansion. Meanwhile, fixed investment growth fell to 21.2% in Q3, marking the worst reading since Q4 2020 (Q2: +77.4% yoy). Public spending, meanwhile, grew at the fastest pace in over a decade, expanding 11.5% (Q2: +8.9% yoy).
Growth in exports of goods and services improved to 18.8% year-on-year in the third quarter (Q2: +6.3% yoy). Conversely, growth in imports of goods and services moderated to 26.2% in Q3 (Q2: +36.8% yoy).
On a seasonally-adjusted quarter-on-quarter basis, economic growth improved to 4.1% in Q3, contrasting the previous period’s 0.9% contraction. Q3’s reading marked the strongest expansion since Q4 2020.
Sergio Armella, economist at Goldman Sachs, remains fairly positive on the outlook for 2021 overall:
“New Covid infections have been low since September and more than 80% of the population has now received at least one vaccine dose (close to 70% are fully vaccinated) which should provide a favorable environment for activity going forward. Overall, we expect GDP growth to reach 9.9% in 2021 vs -9.9% in 2020.”