Economy & Business - July 2023

ARGENTINA | Drought batters economy. Argentina’s first quarter GDP figures, released by the national statistics institute (Indec) on 21 June, showed modest growth, with the economy expanding 1.3% year-on-year and 0.7% compared to the previous quarter (below market expectations). This result reflects the impacts of an ongoing severe drought, with agriculture & livestock contracting 11.9% year-on-year (one of just three segments to see a negative performance). More recent economic activity figures, released by Indec on 30 June, show this trend continuing, with the April monthly index for economic activity (Emae) registering a 4.2% contraction year-on-year (and a -1.9% monthly variation), largely driven by a 36.8% contraction in agriculture & livestock. Trade is also impacted, with figures for May showing a US$1.15bn trade deficit, as exports sunk 24.8% year-on-year to US$6.2bn, while imports dropped a more modest 6.7% to US$7.36bn. Large drops in the sale of primary products (-37.2%) and manufactured goods of agricultural origin (-29%) – sectors impacted by the drought – help explain the sharp decline in exports.

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