Argentina: Economic activity expands at quickest pace since January 2023 in May
The monthly indicator for economic activity (EMAE) grew 2.3% in year-on-year terms in May, which contrasted April’s 1.6% decrease. May’s print marked the best reading since January 2023. May’s reading was largely due to faster growth in the agriculture sector, as the sector recovered after last year’s drought. In addition, the manufacturing and hotels and restaurants sectors decreased at softer rates.
On a monthly basis, economic activity rose at a 1.3% in May (April: 0.0% mom), the best result since July 2023. Meanwhile, the trend improved sizably, with the annual average variation of economic activity coming in at minus 2.1% in May, up from April’s minus 2.8%.
On the reading and outlook, Goldman Sachs’ Sergio Armella said:
“As expected, a much stronger harvest, in contrast to the poor agricultural production of 2023, drove the economic activity rebound in May […] We expect the activity rebound to be short-lived (constrained to the harvest months). In our view, growth should remain weak in 2024 amid a macro rebalancing process where a sizeable fiscal drag and an erosion of households’ disposable income is taking place. Nevertheless, as inflation moderates, positive real wage growth in the second half of the year could support consumption and activity.”