Argentina Macroeconomic Perspectives

Argentina: Driven by the agriculture sector, the economy grew 2.6% yoy in May

• Economic activity achieved 0.2% mom s.a. positive growth in May. As was the case in previous months, growth was boosted by the rebound in agriculture production, which has expanded for the past ten months and surged 49.5% yoy. Although activity in main sectors remains below last year´s level, monthly reports signal improvements in industrial production and construction. Hence, it is likely GDP will grow in 2Q, ending five straight quarters of contraction.
• Cereal exports also favored the trade balance and inflow of funds during the first half. Until June, the trade surplus totaled USD 5.588 mill. (-USD 4.864 mill in 2018), partly due to the strong fall in imports, consequence of the recession and peso depreciation. Additionally, over USD 4.800 mill. were accounted as Export payments during June, half of which referred to cereal exports.
• Furthermore, days before primary elections take place, exchange rate stability and decelerating inflation expectations bolstered confidence indexes. During July Consumer confidence rose 8.9% mom, and Government confidence 6.1%, both attained their third monthly improvement, almost reaching pre-crisis level.