in December 2022 economic activity declined again (1% compared to November) following the trend of the previous three months, mainly due to the decline in the agricultural sector, largely due to drought, and also due to the industrial drainage due to the lack of foreign currency for importing inputs and spare parts.
Nonetheless, the cumulative year closed with a rise of 5.2%, according to the first estimate of the evolution of Indec’s economic activity according to its Emae index. However, the outlook for 2023 is not positive due to, among other things, the consequences of drought and lack of foreign currency for imports affecting the production lines of various activities.
For example, consultants and analysts participating in the REM (market expectations survey) released by the Central Bank have projected in their latest forecasts a real change in gross domestic product (GDP) for 2023 of just 0.5%.
Compared to December 2019, the economy is slightly higher by more than 4%, but on a similar level to 2017, when the recession started. “However, to calculate the real growth of an economy, income must be calibrated in terms of inhabitants. In this sense, measured per capita, 2022 GDP would be 6% lower than 2017”, clarifies the LCG consultancy.
In 2018 the economy fell by 2.6%, in 2019 by 2%, in 2020 (pandemic and quarantine through) it collapsed by 9.9% and in 2021 it rebounded by 10.4%. Last year it started with 6%, the second quarter with the highest growth was (7.1%), it fell to 5.9% in the third and the fourth would have fallen to less than 2%.
“Among the sectors that grew the most during the year were restaurants and hotels (34.6% annual average, product of a low comparison base), mining (13.5%), transportation and warehousing (8. 4%), trade (6.1%), construction (5.5%) and industry (5%)”, calculated LCG.
“Among those that have grown the least, financial intermediation (0.5%) and healthcare (1.3%) can be mentioned. Agriculture, for its part, is the only sector with a negative closure: 4% on average per year (the drop was 18% year on year in December)”.
Among the sectors that contributed the most to the 5.2% increase, commerce, industry and transport stand out, contributing almost 1 point each and entrepreneurial activities for about 0.6 points.
According to the Industrial Union, “in 2022 industrial activity closed with an annual increase of 6.5% and it was the second consecutive year of growth, after the sharp decline in the years 2018-2020. Production managed to exceed the levels of 2017 (3.6%) and was slightly lower than that recorded in 2015 (2%).Although the recovery was significant in per capita terms (taking into account demographic growth) it is still far from the maximum level reached in 2011, 16.4% lower”.
For this year, consultancy firm LCG says “we expect the business to be negatively impacted by a number of variables. First for the Drought itself, but also due to the decrease of foreign currency which it generates through lower exports, which would have its correlate in a lower availability of foreign currency for imports. For this reason, the conditions on operations in the industrial sector are more palpable than last year. On the other hand, with inflation continuing to be high and running at rates of 95-100% per annum, it is difficult to expect a recovery in wages and, with it, in consumption. In summary, we expect an average decline of about 2% per year”.
Source: Clarin
