MercoPress. South Atlantic News Agency

Argentine economy grows 0.5% in first quarter: fishing and transport compensate fall in agriculture and construction

Latin America's third largest economy was helped by 7.5% growth in its fishing sector and 4.2% expansion in transport.

Argentina's economy grew 0.5% in the first quarter the government said on Wednesday, adding that it saw activity leveling out this year before accelerating in 2017. The year-on-year result, published by the newly revamped Indec statistics agency, followed analysts' forecasts for a 1.3% contraction for the January through March period.

 Latin America's third largest economy was helped by 7.5% growth in its fishing sector and 4.2% expansion in transport. Construction and agriculture, crucial because the country is a grains-exporting powerhouse, both fell by more than 5%, Indec said.

Indec also revised its 2015 growth figure to 2.37% from the 2.1% expansion Macri's government initially reported for last year.

“There's a mix in the economy. There are sectors that are moving along at a good pace and other sectors that are dragging,” Argentine finance minister Alfonso Prat-Gay said on the sidelines of the Pacific Alliance trade bloc summit in Puerto Varas, Chile.

“We think that by the time we get to the end of the year all this is going to be evened out and certainly, next year will be a year of growth,” he added.

Macri's government has eliminated currency controls and grains export taxes, lowered utility subsidies, and settled a long-standing lawsuit with bond-holders that had kept the country in default.

“We believed that during this reasonable time of six months some of the things that are going to boost growth in the second half of the year would start to get resolved,” Prat-Gay said.

The Finance minister also seems to have imposed his focus in the struggle with the Central bank, headed by Federico Sturzenegger, who was more determined to combat inflation with high interest rates. Prat-Gay is more concerned with the economy picking up even with high inflation, given the political and social consequences both in Congress and in the streets with the unions.

President Mauricio Macri has fifteen months to get the economy steaming again since in October 2017, he faces midterm elections, and it could be a chance to ensure a larger support in Congress.