Argentine GDP declines 5.9% in July from same time last year, most severe contraction in 14 years.
Argentina's economy registered its most severe contraction in almost 14 years in July, shrinking by 5.9% when compared with the same month last year, the INDEC statistics bureau announced yesterday.
GDP so far this year is down 2.3% compared to last year, with the recession appearing to deepen with each passing quarter since the right-wing Mauricio Macri administration took office in December. GDP, which grew 2.5% in 2015, was up by 0.4% in the first quarter, down 3.4% in the second, and with July data in, will likely round out the third quarter down at least 6%.
This was a steeper decline than even the gloomiest estimates, and casts a further shadow over the government’s economic plans. Economy Ministry sources sought to explain away the fall of almost 6% by claiming that last year's figures were "inflated by public spending at its peak."
Their own data shows, however, that the recession has been led by plummeting business investment, which fell by 4.9% in the second quarter compared to the same time last year - a much sharper decline than either private or public consumption. For July, pro-business economist Orlando Ferreres estimates that fixed private investment fell by 9.6%.
The recession is most severe in construction — down 23.1% in a year, and down 14.1% so far in 2016. Manufacturing is also down by 7.9%, with the sharpest drops coming from raw steel (-17%), the auto industry (-12%), and building materials (-11.6%).
Retail sales figures confirm the ongoing consumer recession, as they rose by 30% in supermarkets and 28.2% in shopping centers in peso terms from the previous July - but because inflation has doubled to 47.2%, registered real declines of 11.7% and 12.9%, respectively.
The only genuinely positive figure yesterday came from merchandise trade, which in August reached a surplus of $705 million compared to $51 million surplus registered the previous August. This improvement was largely due to an 8.1% decline in imports, as the recession impacts demand from abroad.
At: http://buenosairesherald.com/article/222192/indec-economy-shrank-59-in-july
