Argentina’s economic activity was flat in June, topping market expectations for a 0.3 per cent year-on-year contraction and beating even more pessimistic private forecasts of a steep decline.
The government published its EMAE economic activity index, a close proxy for gross domestic product, on Friday. The data showed a 1.1 per cent expansion in June versus May.
Latin America’s No. 3 economy expanded 8.9 per cent last year. But growth is slowing sharply due to high inflation, a sluggish world economy, waning demand from top trade partner Brazil, lower grains output and the impact of new trade and currency controls that have dented confidence.
The INDEC statistics institute said growth in the 12 months through June was 5.3 per cent. But many economists believe the agency exaggerates annual growth by as much as 3 per centage points, while also drastically low-balling inflation.
Although official growth data has been surprisingly negative in recent months -narrowing the gap with private estimates -the government’s June figure stands in stark contrast to the 3.9 per cent drop in economic activity measured by the Orlando J. Ferreres & Associates consulting firm.
In May, INDEC reported the first year-on-year contraction since July 2009, when the world was grappling with financial crisis.
Eleven analysts surveyed by Reuters gave estimates for June’s economic activity ranging from a 1.1 per cent contraction to 1.0 per cent growth, with a median of -0.3 per cent.
Industrial production sank in the month of June, dragged down by weak Brazilian demand for Argentine cars.