Argentina Foreign Direct Investment (USD bn)

Year-on-year GDP growth should have slowed in Q4. Economic activity in the quarter posted weaker readings compared to Q3. Additionally, consumer sentiment moved deeper into contractionary terrain against a backdrop of surging inflation and interest rates and a falling peso. Available data for the current quarter indicates the economy remains in the doldrums. Inflation climbed further in January, while consumer sentiment remained deeply downbeat, and the peso kept weakening in January and February. Meanwhile, a historic drought, coupled with frosts, is hitting soybean and corn harvests, leading the government to start talks with the IMF to ease FX reserve targets for this year. Moreover, due to cases of bird flu, the government suspended poultry exports in late February. In politics, in February the government lost its majority in the Senate when four senators left the ruling coalition.