Written by Hernan Nessi
BUENOS AIRES (Reuters) – Argentina’s economic activity is likely to fall by 5.9% in February from a year ago, a Reuters poll of market analysts said on Monday, as new liberal president Javier Millay The outlook is for the economy to fall for the fourth consecutive month amid strict austerity measures being taken under the current economic climate.
The expected slide will help improve the government’s fiscal position after years of deficits and rebuild depleted central bank reserves, while also highlighting the impact Millais’ cost cuts will have on the real economy.
In a mid-April poll, 11 analysts said strong agricultural and mining activity was offset by sharp declines in consumption, manufacturing and construction, with the month’s decline up to 7.1% year-on-year, up from 4.1% a year earlier. estimated to be within the range of .
Consulting firm Orlando Ferreres & Associados said: “Agriculture and mining have shown healthy growth rates, helped in part by low comparative standards, while sectors such as commerce, industry and construction are experiencing significant contraction.” said.
Mr. Milley’s austerity plan included reducing the size of government, cutting fuel and transportation subsidies, closing state agencies, and auditing the welfare system.
He is balancing the need to stabilize the nation’s finances while avoiding social unrest amid rising tensions with high inflation that is hurting spending power as a result of widening poverty. We are racing against time to resolve the economic crisis.
Pavlo Besmedrisnik, an economist and director of consulting firm Invenomica, said consumer spending will remain weak and, along with lower state spending, will weigh on activity in the coming months.
If official statistics released on Tuesday confirm the decline in February activity, it would follow a 4.3% decline in January and a 4.5% decline in December. Activity index data provides useful information for understanding GDP numbers.
Eugenio Mari, chief economist at the Libertad y Progreso Foundation, sees a light at the end of the tunnel as he sees signs that inflation, which has been running at nearly 300% a year, is slowing.
“We expect economic activity to bottom out in March,” he said.
“From April onwards, economic activity will start to recover, especially in some sectors of the economy, especially exporters. Combined with a slowdown in inflation, this will open the door for a recovery in the purchasing power of salaries and pensions.”
(Reporting by Hernan Nessi; Editing by Adam Jourdan and Aurora Ellis)
