INDEC reported this afternoon that in 2022, economic activity grew by 5.2% compared to the previous year. The good news pales in detail when analyzing what happened in the latter part of the year in detail: in the fourth quarter there was a decrease of 1.5% compared to the previous quarter.
In the latter part of last year, only exports had a positive result, with an expansion of 8.7%. Private consumption, on the other hand, decreased by 1.5%; public consumption fell by 0.3% and gross fixed investments lost 7.2%.
INDEC indicated that the original series of gross domestic product, compared with the same period a year earlier, showed a 1.9% increase in the fourth quarter.
In addition to the external sector, in the fourth quarter of last year, hotels and restaurants grew, with an increase of 20% on an annual basis, private households with domestic service with 13%, and mines and quarries with 11.1%.
The 5.2% increase in GDP in 2022 responded to the increase in all components of demand: private consumption grew by 9.4%; public consumption, 1.8%; exports, 5.7%; and gross fixed capital formation increased by 10.9% compared to 2021.
With these records, 2022 was the second consecutive year of growth after rising 10.4% in 2021. That time the business recovered what it lost in 2020, due to the isolation decreed by the pandemic, which led to a 9.9% contraction in production.
Measured at current prices, private consumption was the largest component of demand at 63.7% of GDPfollowed by Gross Fixed Investments (17.3% of GDP), Exports (16.8% of GDP) and Public Consumption (15.6% of GDP).
What will come in 2023
The decline in activity in the last quarter of 2022 remains for the beginning of this year. With the drought in the midst, growth forecasts for 2023, which until a few months ago marked a 1% expansion, are now being recalculated towards recessionary levels.
The drought that will subtract more than 20 billion dollars agricultural production, will have an impact that will lead to a drop of at least 2 points of the gross product.
For the Capital Foundation, the decline in activity will be 2.7%, in a year that you define as “no engine for growth”.
For JP Morgan, economic activity will decrease by 1.7% over the year and up to 2% in 2024, “making the country suffer again for two consecutive years of recession and up to 13 years of stagflation”.
For now, the Government maintains the growth projection estimated in the Budget Law, which forecasts gross product growth of 2% for the year.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.