Economic activity up 2.6% in May thanks to harvest boost

ECONOMY

Twelve consecutive months of negative growth came to a halt in May when economic activity grew 2.6 percent year-on-year, and 0.2 percent compared to April, as a result of an agricultural harvest boom, according to a report released Thursday by the INDEC national statistics bureau.

Argentina dropped into recession in 2018 and was down 3.1 percent year-onyear in the first five months of 2019, according to INDEC.

Economic activity fell 2.5 percent last year. The International Monetary Fund

(IMF) adjusted its estimate for this to a contraction of 1.3 percent.

Agriculture production in May was exceptionally high, showing a marked 49.5 percent difference year-on-year, which explains the strong performance. Almost all sectors of industry and commerce continued to shrink, however.

Farmers harvested 156 million tons of grain and oilseeds, a record according to the Agro-Industry Secretariat.

“Looking forward, it is expected the agricultural campaign, which unlike 2018 enjoyed good weather conditions, will continue to contribute to growth,” a statement said.

Transportation and communications and education also showed positive growth compared to April of last year.

The government and Central Bank are coordinating measure to prevent future rises in inflation and other shocks that would affect the reelection chances of President Mauricio Macri in October.

The report was good news for the president whose approval rating had suffered due to the relentless recession.