Slight growth in activity level in May: 0.3%

Economic activity grew by 7.4% in May compared to the same month last year and by 0.3% compared to last April, the National Institute of Statistics and Census (Indec) reported Wednesday.

In this way, the monthly economic activity estimator (EMAE) has accumulated an increase of 6.2% in the first five months compared to the same period of 2021. And two consecutive months of monthly expansion (in April it had given 0.5 %).

By rumors, the main increase was recorded in hotels and restaurants, with an improvement of 44.3% year-on-year, which is explained by the fact that this sector was one of the most affected by the coronavirus pandemic.

In second place the exploitation of mines and quarries with an increase of 14.2%, followed by construction with 13.8%; wholesale and retail trade, 11.6%; transport and communications, 11%; and industry with an increase of 10.6%.

In the meantime, the fishing item improved by 9.9% on an annual basis; public administration, defense and security, 9.6%; net taxes and subsidies, 9.3%; and the production of electricity, gas and water, 7.8%.

Real estate activity was below the average of 7.4%, with an increase of 7.3%; teaching, 6.3%; financial intermediation, 2.8%; and Social and health services, 1.3%.

In May the only item that showed a negative result was Agriculture and Livestock, with a decrease of 5.3% on an annual basis.

EMAE is an indicator prepared by Indec and is a proxy, i.e. an approximation, of GDP. The difference is that the EMAE is monthly and the GDP is quarterly. EMAE tends to accurately replicate movements in GDP.

“Although real GDP grew 7.4% year-on-year, it turned out to be below the market consensus of 8.3%,” a Goldman Sachs report said. “Rising from 5.4% yoy in April”.

In May, activity was 6.4% above the pre-pandemic level, but still 2.3% below the November 2017 peak.

“If GDP remains stable at the May level for the rest of the year, real GDP would grow 0.8% quarterly in the second quarter and 4.8% in 2022,” Goldman Sachs believes. “We expect economic activity in the future to face headwinds from very high inflation and acceleration.”

According to the consulting firm LCG, “in the second half of the year, trade would begin to suffer from a build-up of inflation which will be much more sensitive in purchasing power. In turn, the current political climate does not accompany and delay any investment project In this way, from a somewhat lean basis, the level of activity will begin to erode. ”

And he adds that “we expect a slowdown in activity towards the second half of the year, with average annual growth of between 2% and 2.5% for 2022, mainly favored by the statistical drag left by 2021 (3.2 %) measured in December compared to December, we expect a decline of 4% per year “.