Taking a hit: A person walks by the Economy Ministry building in Buenos Aires’ financial district. Economic activity fell 1.9% in April from a month earlier, more than median estimates for a 1.2% decrease. — Reuters
BUENOS AIRES: Argentina’s economy contracted more than expected in April as a record drought took its toll on trade, a sign that the economy is likely to enter recession later this year.
Economic activity fell 1.9% in April from a month earlier, more than median estimate for a 1.2% decrease.
The economy shrank 4.2% from a year ago, according to government data published last Friday. The year-on-year drop exceeded all forecasts of economists surveyed by Bloomberg.
A record drought in Argentina is ravaging forecasts for essential commodity exports that help drive growth.
Consumer spending is also suffering as inflation running at over 100% decimates purchasing power.
Moreover, this year’s presidential election added uncertainty to economic activity, as investors eagerly await the potential reversal of an unconventional set of economic strategies like price freezes and byzantine currency controls.
Economists surveyed by Argentina’s central bank anticipate that gross domestic product will shrink 3% this year, followed by another decline in gross domestic product in 2024. — Bloomberg
