Argentina's economic activity expanded 4.0% in June compared with the same period the prior year, government statistics agency Indec said on Thursday, the latest sign of economic recovery ahead of legislative elections in October.
Economic activity in June rose 0.3% compared with May, Indec said. The economy grew a cumulative 1.6% in the first half of the year, marking a continued recovery from a biting recession in the first half of 2016. The economy contracted by 2.2% overall last year.
June marked the fourth straight month of year-on-year gains, providing a boost to President Mauricio Macri's market-friendly government ahead of October's mid-term vote, where a positive result could give political momentum to the rest of his agenda, including reforms to the country's tax code and capital markets.
His Let's Change coalition performed better than market expectations in a primary vote on Aug. 13, virtually tying former populist President Cristina Fernandez in a Senate race for politically crucial Buenos Aires Province. More economic improvements in the coming months could give Macri's candidate the edge.
June's expansion was led by a recovering manufacturing sector, which grew 6.2% after snapping a streak of 15 consecutive months of contraction in May. Agriculture, spurred by record wheat and corn crops, grew 4%.
Construction activity was up 13.2% compared with June of last year, driven by public infrastructure investment and growth in the real estate market as Macri's government expands mortgage credits.
Also on Thursday, Indec said Argentina posted a trade deficit of US$798 million in July, the seventh straight month with a negative balance. Exports grew 5.2% compared with the same month last year to US$5.2 billion, while imports grew 29.9% to US$ 6 billion.