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Argentina's economy lifting out of recession: activity rises in May for the first time in a year

Friday, July 26th 2019 - 09:59 UTC
Full article 6 comments
Argentina’s Treasury said the rise was due to strong growth from the farming sector, which it said was up nearly 50% versus a year ago Argentina’s Treasury said the rise was due to strong growth from the farming sector, which it said was up nearly 50% versus a year ago
The monthly growth will come as welcome news for Macri, whose popularity has taken a pounding from a tumbling economy The monthly growth will come as welcome news for Macri, whose popularity has taken a pounding from a tumbling economy

Argentina’s economic activity rose for the first time in over a year in May, a rare boost for President Mauricio Macri as he looks to dig the South American country out of a crippling recession ahead of presidential elections later this year.

The 2.6% rise versus the same month a year ago topped even the most optimistic estimates from analysts, and broke a run of 12 consecutive months of falling economic activity.

The monthly growth will come as welcome news for Macri, whose popularity has taken a pounding from a tumbling economy. The conservative leader faces a tight election race against a resurgent opposition ahead of an Oct. 27 vote.

Argentina’s Treasury said the rise was due to strong growth from the farming sector, which it said was up nearly 50% versus a year ago, as well as improvements in sectors including transport, industry, commerce and construction.

“Looking forward, it is expected the agricultural campaign, which unlike 2018 enjoyed good weather conditions, will continue to contribute to growth,” the ministry said, adding better salaries and lower inflation should also help. All this allows us to imagine growth continuing in the months ahead.”

There have already been recent signs of a fledgling revival in Argentina's economy, with a more stable peso and lower inflation bolstering the president’s chances of re-election.

Argentina’s economic activity fell 1.3% in April after a 6.9% drop in March, and had been contracting for over a year amid an economic crisis that has hit the peso currency and driven up inflation.

In other good news, Argentina had a trade surplus of US$ 1.06 billion in June, the government statistics agency INDEC said on Thursday, compared with a deficit of US$ 322 million in the same month a year ago.

Argentina has seen exports bolstered by a weak local peso currency, and posted a trade surplus of US$ 1.373 billion in May.

Analysts had predicted a trade surplus of around US$ 1 billion, driven by strong farm exports and falling imports linked to tepid domestic consumption and a weak peso.

Top Comments

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  • Zaphod Beeblebrox

    As Reekie might say “Another source of enjoyment for Argentines, coming right to them courtesy of president Mauricio Macri and his Joyful Revolution.”

    Jul 26th, 2019 - 06:18 pm +2
  • Zaphod Beeblebrox

    Hey Reekie,

    I was talking to someone who lives in Argentina over the weekend and he said that he thinks Macri will win the election.

    Why? CFK does not have enough support to win more than 50% in the first round and Macri would then win the second round. He says that people recognize that the economy is a mess (but what's new?), and there is probably still some level of corruption but Macri has made a very visible improvement to infrastructure so at least they know that some money is being invested to benefit the economy. They don't want to return to the horror of CFK when everything was stolen! So, all the negative points you keep repeating are recognised BUT they still prefer this to turning the clock back to CFK. OK, just one person's opinion and it may not be representative but at least it is from someone who is living there.

    We shall see...

    Jul 29th, 2019 - 05:51 pm +1
  • Chicureo

    Enrique, the reason why the Argentine Peso “remains one of the most vulnerable currencies” is in fact due to the horrendous corrupt economic management by the previous husband/witch administration.

    Macri has made some mistakes, but he's CERTAINLY far less corrupt than CFK...

    Jul 29th, 2019 - 07:41 pm +1
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