MercoPress. South Atlantic News Agency

Argentina’s industrial production falls for fifth month running

Private analysts and economists coincide Argentina is in recession

Argentine industrial production fell 1.7% in May from a year earlier and was down 0.2% on the month, according to the latest release from the country’s Statistics Institute. This is the fifth month running that industrial production has been contracting.

The annualized figure represents a deterioration from the 1.4% on-year contraction posted in April, and was also well below the minus-1% consensus on-year forecast contained in the Central Bank's monthly survey of economists.

As with other indicators in Argentina, the forecasts that economists submit to the central bank survey reflect their expectations for Indec's report but not necessarily their estimations of actual economic performance.

Indec's numbers are widely discredited amid allegations of government interference since the administration of former president Nestor Kirchner replaced professional experts in statistics with political cronies.

Many of the estimations on the real state of the economy present a far more alarming picture than is contained in official data. Orlando J Ferreres & Asociados, OJF, said last week that it estimates May output fell 8.6% on the year.

The Argentine Industrial Union had anticipated an industrial production contraction of 9.6% in April over a year ago, and 9.5% since the beginning of the year.

Meanwhile, the Foundation for Latin American Economic Research, or FIEL, said late Wednesday that May industrial output tanked 12.2% on the year. FIEL said output was unchanged from April. Both figures are seasonally adjusted.

Various reports have independently estimated that Argentina entered into a severe recession in the first quarter, even though Indec data as recent as Thursday's March economic activity report suggest it continues to be growing.

Also Wednesday, Indec reported that industry was running at 71.6% of full capacity in May, down from 74.9% a year ago and 74.7% in April.

According to Indec contraction was most severe in the auto, metal and textile industries, 20.7%, 35.2% and 12,2% respectively.