Argentina’s economy has finally broken a six-month streak of contraction, posting a 2.3% growth in May compared to the previous year.
This data, released by the National Institute of Statistics and Censuses (Indec), marks a significant turning point for the South American country.
Additionally, Argentina saw a 1.3% rise from April, the first month-to-month improvement since September 2023. Despite this positive development, economic activity over the first five months of 2024 still fell by 2.9%.
The agricultural sector played a crucial role in this recovery, boasting a staggering 103.3% year-over-year increase.
This sector’s growth helped counterbalance some of the declines in other areas. However, ten out of sixteen sectors measured still reported year-over-year decreases in May.
Construction plummeted by 22.1%, manufacturing dropped by 14.2%, trade declined by 11.4%, and fishing fell by 10.5%. These sectors continue to struggle, highlighting ongoing challenges within the economy.
In the first quarter of 2024, Argentina’s Gross Domestic Product (GDP) fell by 5.1% year-over-year.
This decline occurred amid an adjustment program implemented by President Javier Milei’s administration.
The program aimed to stabilize the economy but has led to reduced private and public consumption.
Argentina’s Economy Sees First Growth in Seven Months: A Deep Dive
Investment saw a dramatic 23.4% decrease in gross capital formation. Imports also dropped by 20.1%, further illustrating the economic strain.
Argentina’s industrial sector registered also a decline, with May 2024 marking a significant 14.3% drop compared to last year.
This downturn wasn’t isolated to just one month; the overall production throughout the year plummeted by 12.8%.
In contrast, from April to May, the decline was less pronounced, at just 0.6%. The setbacks varied across different industrial segments.
The automotive sector experienced the most severe hit, tumbling by 40.2%. Cement dispatches and agricultural machinery weren’t far behind, with reductions of 32.8% and 36.6%, respectively.
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