Economic activity is stagnating, with growth of just 0.2% in February

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economic activity as a whole grew by 0.2% in February compared to the same month last year, while showing no difference from January, the National Institute of Statistics and Census (Indec) reported today.

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In the first two months of the year, the Monthly Estimator of Economic Activity (EMAE) recorded an increase of 1.6% compared to the same period last year.

The index therefore shows stagnation compared to the slight rebound recorded last month. In January 2023, the EMAE recorded an increase of 2.9% in the year-on-year comparison and of 0.3% compared to December in the seasonally adjusted measurement.

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This cut a streak of four consecutive months with negative numbers in the monthly change.

From the Ministry of the Economy, they also estimate that the Gross Domestic Product (GDP), with which the EMAE shares several indicators, will increase by 2% this year, despite the severe drought affecting the agricultural sector.

Meanwhile, the International Monetary Fund (IMF) has estimated this growth at 0.2% and the World Bank has ensured that the economy will remain stagnant.

Analysts of the local financial market, for their part, estimate that this year GDP will fall by 3%, according to the Survey on Market Expectations (REM) carried out by the Central Bank.

Beyond the estimates, in the February EMAE nine items recorded year-on-year increases, among which they stand out Exploitation of mines and quarries, with 11.1%; and Hotels and restaurants, 8.6, followed by Real estate, commercial and rental businesses, with 2.1%.

The distribution of water, electricity and gas also increased by 6.7% on an annual basis; 2.9% Education, 1.1% Health Services; among others.

For their part, six business segments report declines in year-on-year comparison, as in the case of Fishing, with 20%; while agriculture and livestock decreased by 0.7%; Industry 1.3%; Trade 0.5%; transport, 0.3%.

The data provided by the EMAE for February also show several trends and the end of others.

Agriculture, for example, which not only contracted by 15.5% year-on-year in the first month of this year, but has already accumulated four months of contraction compared to the same period a year earlier. For example, ten of the last twelve months have produced negative data and the crisis affecting the agricultural sector due to drought anticipates an equally complicated start to 2023.

Even financial intermediation had numbers in the red for several months (from August to December last year), but in January it managed to mark a slight improvement of 0.6%, again in the interannual comparison.

However, there are other sector data showing positive streaks. One is the hotel and restaurant category, which has been recording year-on-year improvements for 22 consecutive months, although it must be taken into account that this is a sector still recovering from the Covid-19 pandemic.

The next EMAE technical report with preliminary estimate for March 2023 will be published on Tuesday 23 May 2023.

Source: Clarin

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