BUENOS AIRES (Reuters) - Argentina’s economy is likely to have expanded slightly in the second quarter of the year, a Reuters poll showed, with weak industrial activity and construction weighing on a stronger showing from the country’s farm export sector.
South American’s No. 2 economy likely saw gross domestic product (GDP) rise 0.1% year-on-year in the April-June quarter, according to the average estimate from 10 local and foreign analysts. The median response was 0.4% growth.
That rise, though tepid, would mark the first quarterly expansion since the start of 2018, since when the country has tumbled into recession as a currency and debt crisis hammered economic activity and consumption.
“In the second quarter we had an economy that alternated between highs and lows... mainly driven by the agricultural sector. Industry and construction gave no signs of recovery,” said Pablo Besmedrisnik, director of consultancy Invenómica.
The estimates from the ten analysts ranged from between a maximum contraction of 1.3% to the most positive view being a 0.5% expansion in the quarter.
Argentina’s official statistics agency INDEC is expected to report official GDP data for the second quarter on Thursday.
Argentina, heading for a presidential election in October, now however faces a new recession challenge as inflation rises after a primary election defeat for President Mauricio Macri in August, which sparked a market sell-off.
The government expects the economy to contract 2.6% this year, and to post 1% growth in 2020.
Besmedrisnik added agricultural exports would continue to take the slack from the rest of the economy, but that more uncertainty lay ahead.
“A slow recovery of various sectors is expected in the second half, while financial and political turbulence, and the resurgence of inflation, will hinder us getting back on the path of growth.”
(Graphic: Argentina in recession, here)
Reporting by Hernan Nessi; Writing by Adam Jourdan; Editing by Chris Reese