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ECONOMY | 23-03-2023 16:49

Argentina’s economy grew 5.2% in 2022, second straight year of growth

Improvement in GDP was consumer-led (up 9.4%) with exports up 5.7%, new INDEC report reveals.

Gross domestic product expanded 5.2 percent last year, the INDEC national statistics bureau reported on Wednesday.

The figure was down from the pandemic rebound growth of 10.3 percent in 2021, but the data shows that Argentina recorded a second consecutive year of growth following a slump in the previous three years.

The improvement in GDP was consumer-led (up 9.4 percent) with exports up 5.7 percent and gross fixed capital formation at 10.9 percent, the INDEC report itemised.

Broken down by activity, the hotels and restaurants sector stood out (35 percent growth), followed by mines and quarries (up 13.5 percent) and private domestic service (improved 10.3 percent).

Other sectors with significant growth were the manufacturing industry (up five percent), construction (5.8 percent), transport and communications (8.5 percent) and wholesale and retail trade (6.4 percent). Agriculture, hit hard by drought,  slumped 4.1 percent.

Economic growth came in a context of high inflation with the cost of living rising 94.8 percent in Argentina last year and clearing the three-digit mark last month to hit 102.5 percent.

Unemployment closed last year at 6.3 percent, as against seven percent in 2021, INDEC also reported on Wednesday.

Argentina is subject to a programme of fiscal discipline with the International Monetary Fund within the framework of an agreement to reschedule a debt of US$44 billion contracted in 2018 by the Mauricio Macri administration.

According to the latest Central Bank survey of the country’s leading economic consultants, expectations of this year’s GDP performance are encouraging although most of those consulted estimate that Argentina’s economic activity will contract around 0.8 percent in the first quarter of this year. Their inflation forecasts for this year are just shy of three digits at 99.9 percent.

Meanwhile, the FIEL (Fundación de Investigaciones Económicas Latinoamericanas) think tank pointed out on Wednesday that the specific case of the industrial sector is "in recession."

"The short-term perspectives point to industrial activity continuing along a weak path," pointed out the report.

Among the causes it lists the impact of the drought on the acquisition of hard currency, the inflationary process affecting real incomes and the Central Bank’s decision to raise interest rates, thus making credit.

"All that adds up to pressures making the consumer market, investment and production shrink," maintained FIEL.

 

TIMES/AFP

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