Just the information given Official figure for recession in early 2024. Indec today confirmed that GDP fell by 5.1% year-on-year in the first quarter of this year, on the back of a sharp contraction in consumption, industrial production and investment.
In fact, this variable showed its worst record in the first three months of the year, with a year-on-year drop of 23.4%, reflecting the short-term negative effects of economic measures used by the government. Companies.
The negative situation in the first quarter after the devaluation of the exchange rate, the acceleration of inflation (57.3% in the period) and the fall in the purchasing power of salaries and pensions decreased by 6.7% per year. Annual % of private consumption, the main component of Argentina’s GDP.
In turn, the adjustment in public spending between reducing goods and eliminating programs was reflected in a 5% year-on-year contraction in private consumption.
The December demonetisation also changed the balance of the external sector: exports rose 26.1% year-on-year against a 20.1% fall in imports, linked to lower levels of activity.
The report published today by Indec confirms the negative trend of the first three months already expected by the sectoral numbers (business, industry, construction) and the company’s own statistics. 5.3% contraction in period.
In the sectoral analysis, industry was the most affected sector and the highest priority sector in the downturn of the economy. This item fell by 13.7% year-on-year and explained 2.16 percentage points of the general contraction of GDP. Other activities with negative dynamics were construction (-19.7% year-on-year), financial intermediation (-13%), trade (-8.7%), transport and communication (-1.1%) and transport sector activities (-1.6%).
Among the winners of this period were agriculture and livestock, which grew by 10.% year-on-year (after the drought that affected the sector in 2023), mines, quarries and exploitation of hydrocarbons (which grew by 8% year-on-year. ) and fishing (3.2%), simultaneously with a high export profile. Three fields.
Despite official enthusiasm for a rebound in activity levels (“the economy is going to rise like a sinker,” Milei said weeks ago), forecasts dismiss a ‘V’ recovery and expect, at best, a gradual rise. Second half of the year. Indeed, in their latest projections, the World Bank and the International Monetary Fund (IMF) Their prognosis worsened.
A leading creature Kristalina Georgieva I expect that now Argentina’s gross domestic product (GDP) will shrink by 3.5% this year, (The decline would be 6% without considering the agriculture sector and its recovery after the 2023 drought). It was at his end Staff report The IMF also warned of the risks of a longer-than-expected recession that could create social tensions in a country expected to grow by 5% by 2025.
According to Alejandro Giacoia, an economist at Econviews, the economy “may have bottomed out” and “may stabilize in the second half”. “This will mean the economy has stopped falling. Most leading indicators show that many red lights have gone off and many green lights have come in April. Less data is available for May, but availability is heading in the same direction,” said the analyst, who forecast a 3.6% annual decline.
“Although it’s not going to be something that’s going to be very strongly felt on the street, we believe that there could be a rebound. On an annual average, the economy will decelerate relative to 2023. In any case, the coming months should be good in terms of activity. The recovery of real wages and the improvement in consumption from that is key. And credit recovery is One that helps not only household consumption but also investment,” concludes the analyst.
