BUENOS AIRES, Aug 18 (Reuters) – Argentina’s economic activity is projected to have expanded by 6.4% compared to the same month last year in June, according to a Reuters survey of analysts, with the median estimate aligning closely with a broader forecast range of 3.2% to 9.9%. A total of 14 domestic and international experts participated in the poll, yielding an average prediction of 6.6% growth for Latin America’s third-largest economy.
Despite the positive figures, experts caution that momentum may be fragile. Eugenio Mari, lead economist at Fundacion Libertad y Progreso (LyP), observed that economic output has seen little movement since February, suggesting underlying stagnation despite the annual uptick.
Pablo Besmedrisnik, economist and director at consulting firm VDC, highlighted that elevated interest rates are dampening expansion and constraining household purchasing power. He noted that pressure on the U.S. dollar is compelling monetary authorities to maintain a tight stance, pushing borrowing costs to high levels.
“This approach is bound to exert a contractionary effect on the economy,” Besmedrisnik added, emphasizing that stagnant income growth among the population further limits domestic demand.
Orlando Ferreres y Asociados, another consulting entity, echoed concerns about a potential slowdown, citing sluggish recovery in consumer earnings and a central bank policy framework that prioritizes inflation control over stimulating economic momentum. Such a strategy, the firm warned, could lead to interest rates that are not only elevated but also subject to greater fluctuations.
The monthly index of economic activity (EMAE), released by statistics agency INDEC, serves as a key proxy for gross domestic product trends. Official data for June is scheduled for release on Wednesday at 1900 GMT.
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Argentina’s economy expected to grow 6.4% y/y in June
BUENOS AIRES, Aug 18 (Reuters) – Argentina ‘s economic activity likely grew 6.4% year-on-year in June according to median forecasts of analysts polled by Reuters, who, however, warned that restrictive monetary policy and risks over the upcoming legislative elections could slow growth. n nThe poll of 14 local and international analysts showed an mean average forecast for 6.6% growth in Latin America ‘s third-largest economy, ranging between estimates of 3.2% and 9.9%. n nSign up here. n n”However, if we zoom out, we find that economic activity has remained virtually unchanged since February,” said Eugenio Mari, chief economist at the Fundacion Libertad y Progreso (LyP) think tank. n nPablo Besmedrisnik, an economist and director at consultancy VDC, pointed to high interest rates slowing growth and limiting improvements for residents ‘ income. n n”The pressure on the dollar is pushing monetary authorities to adopt a very restrictive policy, raising interest rates to very high levels,” he said. n n”This reality will necessarily have a recessionary impact, which adds to the low dynamism of the population ‘s income.” n nConsulting firm Orlando Ferreres y Asociados said it saw more risk of a slowdown in activity, citing a stagnation in the recovery of household incomes and monetary policy that prioritizes fighting inflation over economic growth. n nThis leads to “higher and more volatile interest rates,” it said. n nArgentina ‘s monthly economic activity data, known as EMAE, is a closely watched indicator that helps anticipate the country ‘s gross domestic product (GDP). n nStatistics agency INDEC will publish the June data on Wednesday afternoon (1900 GMT).