Argentina’s economy declined by 1% monthly in February – Indec

RIO DE JANEIRO, BRAZIL – The economic activity in Argentina experienced last February a 1% decline compared to last January, thus breaking the upward trend of the previous nine months, in which the national economy showed signs of recovery after the abrupt collapse recorded in April 2020 due to the confinement measures in the face of the covid-19.

The data released this Thursday by the National Institute of Statistics and Censuses (Indec), and which serves as a provisional advance to measure the quarterly variation of the gross domestic product (GDP), shows that economic activity also fell in the second month of the year by 2.6% in year-on-year terms.

In that sense, this is the first monthly decline reported since April last year, when the country’s economy plummeted by 17.2% compared to the previous month due to the social, preventive, and compulsory isolation.

Likewise, with the year-on-year fall recorded in February, economic activity accumulated 19 months in decline in Argentina, after the slight advance of 0.3 % verified in July 2019.

The Indec report reveals that, of the 16 activities included in the indicator, ten productive sectors showed year-on-year declines in the second month of the year.

According to the data released this Thursday, the sectors that showed greater magnitudes of fall were hotels and restaurants (-38.2 %), other community, social, and personal services activities (-17.7 %), fishing (-16.7 %), and transport and communications (-15.6 %).

The sectors that showed the strongest positive year-on-year performance were construction (11.7%), financial intermediation (3.5%), and wholesale trade, retail, and repairs (3.4%).

Argentina’s GDP experienced a 9.9 % plunge in 2020, deepening the recession that began in 2018.

Forecasts for this year are for recovery: while the Government foresees an improvement of 5.5 %, private economists consulted every month by the Argentine Central Bank. Its expectations report project a rebound of 6.7 %.

In any case, some analysts remain cautious about growth projections, which could be revised downwards due to the tightening of sanitary restrictions.