(Adds revisions to prior quarters' figures, breakdown of
sectors contributing to contraction, economic background)
By Luc Cohen
BUENOS AIRES, Sept 22 Argentina said on Thursday
the economy shrank 2.1 percent in the second quarter from the
first quarter of 2016, as the country remained mired in
recession during the first year of President Mauricio Macri's
Compared with the same quarter of 2015, gross domestic
product shrank 3.4 percent in the April-to-June period, the
first quarter of year-on-year contraction since at least 2015.
The government expects a return to annual growth in 2017.
Year-over-year declines in Argentina's construction,
manufacturing and agriculture industries weighed most heavily on
the economy in the second quarter, according to Indec, the
government statistics agency.
The South American country had growth in the public sector,
however, as well as restaurants and hotels and transportation.
Macri's center-right administration, which took office in
December after more than a decade of leftist rule, has been
trying to reform the economy through free-market measures.
It has eliminated currency controls and grains export taxes,
lowered utility subsidies and settled a long-standing lawsuit
with bond-holders that had kept the country in default.
Indec revised its estimate for the third quarter of 2015 to
growth of 0.1 percent from the prior quarter, up from a
contraction of -0.1 percent. That means the second quarter of
2016 was the third consecutive quarter of contraction.
Indec also revised growth for the second quarter of 2015
down to 1.1 percent from 1.4 percent and revised first-quarter
2015 growth up to 2 percent from 1.7 percent.
Finance Minister Alfonso Prat-Gay said earlier this week
that the economy would break its contraction streak in the
This was the second time Macri's administration announced
quarterly GDP figures following a major revamp by the statistics
agency. The prior administration's economic statistics were
widely viewed as manipulated.
In addition to recession, Argentina is suffering inflation
of around 40 percent this year, although the government expects
it to fall to 17 percent next year.
Argentina is planning a euro-denominated bond issuance and
has tapped three banks to arrange meetings with fixed income
investors in Europe beginning next week, Thomson Reuters
publication IFR reported on Thursday.
The country has already raised nearly $20 billion in
sovereign debt after a successful return to global bond markets
in April following a 15-year absence.
The debt will help finance a stubbornly high fiscal deficit,
which ballooned after decades of populist rule, largely due to
generous spending on social programs.
(Reporting by Buenos Aires newsroom, writing by Luc Cohen;
editing by David Gregorio and Dan Grebler)