Argentina’s economic activity index (EMAE), which is seen as a close proxy of GDP, fell 0.5% in April compared with the same month last year, according to data released by the government's stats office Indec. Nonetheless activity went up 0.6% in April compared to March.
The stats office also included downward corrections for the first two months of the year, with January’s EMAE, dropping from an initially reported 1.3% to 1% and February moving down from 1.3 to 0.9%.
In the same inter-annual monthly comparison, the economic activity index has thus dropped 0.9% in March, risen 0.9% in February and increased 1% in January.
The abrupt and sharp decline of the auto sector in terms of production, domestic sales and exports was reflected in the contracting EMAEs of March and April. This despite the government of president Cristina Fernandez' renewal of a trade pact with Brazil and the unveiling of the Procreauto credit scheme for car purchases.
The Argentine auto sector crisis was triggered by a luxury goods tax hike that had a trickle-down effect, starting with significant drops in premium car sales and culminating in temporary suspensions for thousands of workers at plants in Córdoba and Buenos Aires province.
April’s data marked the second consecutive fall in the monthly EMAE economic activity index only published on a quarterly basis. Data released last week showed Argentina’s economy slid into recession in the first three months of the year, marking two consecutive quarters of contraction.