INDEC: Economy shrank 2.7% in July

The

economy contracted by 2.7 percent in July compared to the same month of 2017, the INDEC national statistics bureau announced on Wednesday, with the first seven months 0.8 percent down cumulatively on the same period last year. The economy is down to the levels of February, 2017, thus wiping out all last year’s recovery.

Industry and commerce absorbed most of the punishment because agriculture is already rebounding from the summer d ro ught,w hile construc ti oncont in u esto grow ata de celeratedr ate. Yet agriculture has onlyim pro vedwhenm ea su red against drought levels, not last year, since it has registered a 10.1 percent fall since last July as against minus 5.1 percent for industry and minus 6.4 percent for commerce. But recent slumps were much sharper, thus adding up to growth for farmers. The only positive sectors were financial activities (7.1 per cent ), real estate (2.3 per cent) andconstruct ion( o ne per cent ).

Economists are already predicting a contraction of 1.7 percent for August with negative figures continuing for the restoft he year dueto ex chang era tev ola tility,high interest rates and public works cuts.

Meanwhile the trade deficit continued to grow in August despite devaluation with exports (minus 1.4 percent) falling faster than imports (minus 0.3 percent) in defiance of the con ven ti on al eco no micw is dom. T he deficitthusn ea red U S $7 billion for the first two-thirds of the year (US$6.993 billion, to be exact) but is expected to close 2018 at around US$ five billionthanks to de val uat ion( animpr ove m en tont he U S $8.47 billion of 2017), returning to surplus next year.

August exports totalled US$5.167 billion as against imports of US$6.294 billion. Economic consultants continue to blame the drought, noting that last month’s soy sales were 31 percent down on the previous August.