The Argentine economy contracted by 2.7 percent in July, according to the latest report released by the Indec statistics agency. This figure mark the fourth consecutive month of decline, with the accumulated output for the year – between January and July – clocking in at a negative 0.8 percent.
The curve began its descent in April with a 0.6 percent decrease and entered its current collapse in May, when the fateful combination of the first stage of the run on the peso and the meager harvest that affected the farming sector – a result of a long drought – produced its first effects.
The economy is expected to continue shrinking until the end of the year: in its budget bill for 2019, the government estimated 2018 will end with a recession equivalent to 2.4 percent of the GDP.
When it comes to monthly terms, the economy grew by 1.4. This figure can mainly be explained by the lower impact of the drought in the agricultural sector’s output, which represents a large percentage of the entire economic landscape: while output in the past three months contracted by roughly 30 percent in average, it did so by 10 percent in July.
Other large sectors of the economy that saw a sharp decline in their figures were industry and retail, with respective contractions of 5.1 and 6.4 percent. The sectors that grew the most, in contrast, were financial intermediation (7.1 percent) and electricity, gas and water (3.9 percent). The latter was largely a result of the increased activity in the vaca muerta region, in the Neuquén Province.