Argentina’s economy contracted 6.7% in June compared with the same month last year, and 1.3% compared with May, government statistics agency Indec said on Thursday. June was the third consecutive month of decline following 5.2% in May and 0.6% in April.
Indec detailed that the agriculture sector fell 31% in June from the same month last year, as crops were hammered by one of the worst droughts in decades. Manufacturing decreased 7.5%, while retail activity fell 8.4%. The construction sector also declined but slightly.
The large real GDP contraction in [the second quarter] was driven chiefly by the negative weather shock over agricultural production and the impact of tighter financial conditions over the broader economy, Goldman Sachs said. We expect the economy to remain weak in coming quarters.
Economists expect Argentina to enter into a recession this year as the country has seen its currency depreciate sharply against the U.S. dollar amid a rout in emerging-market currencies and concerns from investors over President Mauricio Macri's political ability to cut spending and reduce inflation.
Earlier this month, the Central Bank of Argentina lifted its interest rate to 45% from 40% in an unexpected meeting aimed at stemming pressure on the nation's currency and the increase in inflation, which hit 31% last month.
After a selloff of the currency in May, Mr. Macri turned to the IMF for a US$ 50bn credit line to shore up the administration as it looks to reduce a government deficit that reached 6.5% of GDP last year, including interest payments on debt.
The economic outlook was further complicated this month with the emergence of a corruption scandal involving public works contractors accused of paying millions of dollars in bribes to ex-president Cristina Fernandez de Kirchner, who denies the allegations.
Bank of America Merrill Lynch said recently that while the graft scandal affecting the opposition is politically beneficial for the government, it will likely hinder the economic recovery next year as several companies involved in ongoing government public works projects are being investigated.
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Reekio,Aug 27th, 2018 - 05:24 pm +2
Amazing. No jack or golf cronies, no zaphods or cats, no chronically old patagonian lads have yet rushed to comment on Argentina's current economic difficulties.
Not that amazing. The story posted on Friday and then (you may be surprised to learn) there was a weekend and not everyone lives their life around MercoPress.
Compare it to the literary industriousness deployed on stories about the current judicial hounding in search for Cristina Fernandez' Holy Grail -- millions stashed away on mythical vaults somewhere in Capital or in the dark Patagonian steppes.
OK. let us do that. Also very little activity, 1 post from Jack, but nobody else on your list.
Some of those commentators' inspiration during CFK presidency seem to have lost their muse since the election of Mauricio Macri as president 32 months ago.
Like you did when Macri got elected and then did well in the half-term elections too? Pot-kettle?
Come on, boys! Your brainpower is badly needed. Why do you think the current government seems to be at the end of its rope after barely 32 months in office? We are all ears.
I have posted some facts on the Argentine economy (with links) on a number of occasions to counter your claims which to me indicate a weak recovery of the economy. Even if the economy is flatlining that would be an improvement on the previous downward trajectory. However, you have not responded to any presentation of actual facts. Why not? We are all ears.
Or would you just rather ignore the actual data and just cherry pick the bad bits that support your opinion while effectively repeatedly yelling flan flan! FLAN!
Macri is an Argentine President. You will know when Macri is really against the ropes when he starts arresting economists and statisticians.Aug 27th, 2018 - 10:16 pm +1
Amazing. 23 hours later and Reekie has not yet rushed to comment on my post (even though he posted on another thread 13 hours ago so he has been here).Aug 28th, 2018 - 05:09 pm 0
Reekie seems to lose his muse when presented with facts.
Come on, Reekie! Why do you think there have been some improvements to the Argentine economy after Macri's 32 months in office?
We are all ears.
(Do you see what I did there?)