Argentina GDP


Argentina: Q1 GDP marks first contraction in nearly two years

June 23, 2014

In Q1, the economy contracted 0.2% over the same quarter last year according to data released by the National Statistics Institute (INDEC) on 23 June, which marked the first contraction since Q2 2012. The print contrasted the 1.4% increase tallied in Q4 and fell slightly short of the 0.1% decline LatinFocus Consensus Forecast panelists had expected.

The deterioration seen in Q1 mostly reflected worsening domestic demand, whereas the external sector improved marginally. Private consumption recorded its largest decrease since the series began in 2004, declining 1.2% in Q1 (Q4: +0.4% year-on-year). Public spending decelerated to a 3.4% increase in Q1 (Q4: +6.7% yoy). Gross fixed investment slowed down to a 1.9% rise (Q4: +2.1% yoy).

On the external side of the economy, exports of goods and services contracted 6.4% in annual terms in Q1 (Q4: -7.8% yoy). Imports followed suit and fell 3.8%, which was below the 2.4% contraction tallied in the previous quarter. The contribution from the external sector to overall growth improved, rising from minus 0.8 percentage points in Q4 to minus 0.2 percentage points in Q1.

On a quarter-on-quarter basis, GDP contracted a seasonally-adjusted 0.8%, which followed the 0.5% decrease tallied in Q4.

LatinFocus Consensus Forecast panelists expect official GDP to decline 0.1% this year, which is down 0.2 percentage points from last month’s forecast. For 2015, participants expect official GDP to grow 1.2%. Additionally, LatinFocus panelists expect non-official GDP to experience a 1.5% contraction in 2014 and to expand a meager 0.7% in 2015.

Author: Ricard Torné, Lead Economist

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