INDEC: Economic activity fell 2% in May from previous month

A rgentina’s economy grew 13.6 percent in May year-on year, but contracted two percent from the previous month, the INDEC national statistics bureau said Wednesday.

The data, from INDEC’S monthly estimator of economic activity (EMAE, anticipating gross domestic product), means that the country’s economy grew 9.5 percent from January to May of this year compared to the same period in 2020.

President Alberto Fernández implemented a temporary, strict lockdown in May, which put a brake on signs of reactivation. The measures, which have since loosened, came amid a surge in Covid-19 cases and deaths.

As beef prices climbed in the beginning of the year, his government also banned beef exports in midmay, lifting the measure in June after reaching a deal with producers.

Analysts anticipate that the economy will resume its recovery from the pandemic in the third quarter, but growth remains challenged by elevated inflation, high unemployment and uncertainty surrounding midterm elections in November.

Argentina has been in recession for three years and GDP collapsed 9.9 percent in 2020.

All sectors studied in the EMAE indicators registered increases in activity in May compared to the previous year, with the exception of agriculture, livestock, hunting and forestry, which registered a fall (minus 4.3 percent), according to INDEC.

Among the greatest positive variations, ‘other activities’ (defined as community, social and personal services) were up 113.6 percent and hotels and restaurants, entirely shuttered during the pandemic initially, rose 54.3 percent from May 2020.

Manufacturing was up 29.9 percent year-on-year, with wholesale, retail and repairs up 23.3 percent. Both items were responsible for more than half of the EMAE’S year-on year rise, according to the bureau.