Buenos Aires: Argentina’s economy contracted for the first time in six months in September amid weak industrial and construction activity, adding to government woes as inflation approaches 100%.
Economic activity fell 0.3% in September compared with a month earlier, according to government data published last Wednesday.
From a year ago, the economy expanded 4.8%. Tourism, mining and construction drove activity during the month, while utilities and financial services contracted.
Industrial production dropped in September while construction activity fell for the third time in four months, other government data reports showed.
High inflation heading toward 100% likely cut short consumers’ buying power during the month too.
Economic growth has proved resilient this year despite expectations of a downturn following political turmoil in July that resulted in three economy ministers in four weeks.
It’s the first contraction for Economy Minister Sergio Massa since he took over in early August.
“Growth this year is possible even with a contraction in the fourth quarter, but the outlook for 2023 is significantly less rosy,” said Adriana Dupita of Bloomberg Economics
In September, Massa implemented a measure known as the “soy dollar,” a temporary exchange rate for exporters of the crop that only lasted a few weeks.
The policy boosted crop exports, which were up 30% last month, but led to backlash from the International Monetary Fund over Argentina’s US$44bil (RM197bil) programme. — Bloomberg
