Argentina’s industrial output plunged 8.1% in June compared with the same month last year, government statistics agency Indec said, the sharpest monthly drop since the country was in the grips of an economic meltdown in 2002.
The Argentine economy is sliding toward recession following a run on the Peso currency that prompted a jump in inflation and forced the government to turn to the International Monetary Fund (IMF) for a US$ 50 billion stand-by financing deal.
Many economists expect the economy to shrink in the second and third quarters of this year, after government data showed activity contracted in April and May. Many businesses are struggling because of Peso depreciation and high interest rates as the central bank seeks to combat inflation.
June marked the second straight month of declines after 12 straight months of industrial expansion. Cumulatively, industrial output was up 1% in the first six months of the year compared with the same period in 2017.
It was the largest decline since output fell 8.5% in August 2002. Industrial production had fallen 8% in October 2016, in the midst of a prolonged contraction in manufacturing activity during the first year of President Mauricio Macri’s term.
By different sectors, oil refining was down 19.9%; metal mechanics and auto production 10.9%; chemical produce and goods, 10.06%; textiles, 10.08%; tobacco, 9.7%; food industry, 5.4%; printing, 4.2%; non metal minerals, 3.7% plus paper and Kraft, 1.2%. However basic metal manufacturing was up 9.8%.
Likewise the construction industry after fifteen months of sustained growth, was down 0.1% in June, but overall June reported a 0.5% advance over May.