Economic activity stopped its recovery in May, by registering a 0.2% setback against April, According to the General Activity Index (IGA-OJF) prepared by the consultancy Orlando J. Ferreres & Associates (OJF). It is about Second setback in the last three months, after the fall of 1.9% in March, and the bouncing of 1.1% in April.
In interannual terms, on the other hand, the level of activity recorded an advance of 4.6% and accumulated a 6% rise in the first five months of the yearmainly driven by the rebound in the agricultural sector after the drought of 2023.
According to OJF’s analysis, “the activity accused a blow in March, a recovery in April, and for May our estimate observes a decrease in the margin of 0.2% monthly in the measurement without seasonality, remaining at a level lower than that reached in the first months of the year.”
May economic activity: sector by sector
Among the sectors of the economy, the interannual expansion continues to lead financial intermediation (+18.8%), Ferreres stressed, followed by the trade (+8.2%), and construction (+6.3%), With this last sector reflecting the low comparison base last year rather than a genuine growth.
Anyway, sector performance during May left disparate signs. Agricultural activity, which had been the main engine of the economic rebound, showed a contraction of 6.2% year -on -yearaccumulating a decrease of 2.8% in the first five months of the year. In detail, Agricultural production fell 7.0%while Livestock fell 1.3%.
In contrast, The manufacturing industry showed an improvement of 3.9% year -on -yearwith accumulated growth of 3.4% so far this year. Automotive production stood out with a 25.2% jumpwhile the cement dispatch returned to register a decrease of 1.0% despite the low comparison base. In unstacted terms, the IPI-OJF grew 1.0% monthly.
In the sector of Electricity, Gas and Waterthe largest year -on -year contraction of the month was observed, with a decrease of 9.3% and a accumulated decrease of 3.8% in the year. According to Cammesa, The 7.5% drop in electricity generation It is due to lower residential demand compared to May 2024, month affected by a cold wave that triggered consumption.
For its part, The mines and quarry sector advanced 4.4% year -on -yearaccumulating a 5.8% rise in the first five months of the year. Within the item, Crude oil production grew 12.7%while Natural gas fell 2.4%.
Economic activity: expectations for the coming months
Thinking in the coming months, from the consultant They expect the level of activity to grow, but some doubts arise about the magnitude of the economic expansion that can be expected.
“Among the main risks we see a lower recovery than the expected income of families, and a exchange rate regime that is harmful to some sectors oriented to the domestic market,” warns the report prepared by Ferreres.
In that line, he adds that “The low nominality is positive for the activity in a broad look, but the absolute priority granted by the Government to the fight against inflation leaves relegated management options that could encourage economic march.”
Growth with heterogeneities and external challenges
The last Argentine situation report of BBVA Research projects GDP growth of the 5.5% in 2025mainly driven by the Agro recovery, investment in strategic sectors and a contractive fiscal policy That, for now, it managed to reduce inflation faster than expected. However, the entity warns that The recovery is not homogeneous and that several foci of structural weakness persist.
“We observe a clear recovery in the tradable sectors, especially in primary and durable goods, while mass consumption, the food and beverage industry, and the services related to the domestic market continue with negative or stagnant records”Points out the report. In that line, it emphasizes that growth will be “concentrated in the sectors most integrated to the external market or that they received specific incentives.”
In inflationary, BBVA estimates that The price rise will be moderated towards 30% average in 2025with descending tendency towards 18% in 2026in a context of strong fiscal and monetary anchor. “The price shock after the initial devaluation was lower than expected, and the low nominality began to consolidate in the second quarter of the year,” says the report.
On the other hand, one of the most relevant challenges for the rest of the year will be on the external front. BBVA foresees a current account deficit equivalent to 1.8% of GDP in 2025explained by a combination of exports that grow little (+2.5%) and a rebound of imports, both for the greatest dynamism of the activity and by the normalization of post-cepo payments.
As for the exchange regime, the entity emphasizes that The transition to an administered flotation scheme has been more orderly than expectedwithout significant voltage episodes. Since April, natural and non -residents can operate freely in the financial market, and from 2026 the repatriation of dividends will be allowed. These signals, together with the inflationary deceleration, contributed to “a more predictable and friendly environment for investors.”
However, BBVA warns that The improvement of real income is still incipient and could condition the speed of consumption recoveryespecially in the lower income sectors. In that sense, the entity indicates that “the success of the economic program will depend not only on the macro order, but also on its ability to reactivate the formal labor market and rebuild the purchasing power of households ”.
Source: Ambito
