Buenos Aires, September 25, 2024 - Argentina's economy experienced a 1.3% decline in July compared to the same month in 2023, despite a 1.7% recovery from June. This news comes from the National Institute of Statistics and Censuses (Indec), highlighting ongoing economic struggles amidst high inflation rates.
The economic activity indicator, which serves as a preliminary measure for quarterly GDP variation, has shown two consecutive months of year-on-year contraction, although the rate of decline has lessened from a 4% drop in June. Overall, economic activity has decreased by 3.1% in the first seven months of the year, influenced by an inflation rate of 263.4% and a significant drop in demand due to severe economic adjustments initiated by President Javier Milei's government.
While five out of the 16 sectors measured reported annual growth in July, notable increases were seen in agriculture, which grew by 23.6%, and mining, which saw a 5.7% rise. However, crucial sectors like construction (-14.8%), manufacturing (-5.6%), and commerce (-5.3%) continued to struggle, contributing to the overall decline.
Consultants predict that the erratic behavior of economic activity will persist, with expectations of a further monthly decline in August. The Central Bank's latest private projections indicate that Argentina's economy may contract by 3.8% in 2024, following a 1.6% decrease in 2023. Looking ahead to 2025, while the government forecasts a robust recovery of 5%, private analysts suggest a more cautious growth estimate of 3.5%.
This situation underscores the complexities facing Argentina as it navigates economic recovery amidst inflationary pressures and structural challenges.