Economic activity had a slight rebound in August and ended a streak of three consecutive falls. Even so, the trend towards stagnation continues, in a context of low real wages, volatile interest rates and pre-election uncertainty.
This Wednesday the INDEC reported that the Monthly Estimator of Economic Activity (EMAE) improved 0.3% compared to July. However, the data from the seasonally adjusted series was lower than those observed between December of last year and May of this year (with the exception of March), while no significant rebounds have been observed for six months.
The consulting firm Equilibra had anticipated in its own measurement that the EMAE had risen 0.5% in the month in question. From the entity they explained to Scope that, although it was expected that the effect of the rate increase would hit harder in August, it was also logical that there would be some rebound in some activities that had been falling a lot in recent months, such as industrial production of food and beverages, or commerce.
Likewise, a couple of weeks ago the INDEC announced that the industry grew 0.6% monthly in August, although it did not manage to compensate for the drop in June and July. The consulting firm LCG showed in a report that half of the sectors showed increases compared to the previous month, while the other half suffered declines; “The food industry grew 2.1% and it could be said that it alone contributed 0.6 points of growth,” he detailed in this regard.
For its part, the activity of construction increased 0.5% monthly. “The data confirms ‘saw’ growth that has been observed in recent months: after a rising month, a falling month follows and vice versa. Thus, activity remains stagnant compared to the end of 2024, which is a level significantly lower than that of November 2023 (-21%)”, LCG stated in its report.
It is worth remembering that Between mid-July and mid-August interest rates shot up sharply as a consequence of the poor coordination of the monetary and exchange rate policy of the economic team. In parallel, as Equilibra reflected in a recent publication, in the first 20 months of Javier Milei’s Administration, the Registered private and public employees, and retirees suffered, on average, a cumulative loss equivalent to 2.3 months of income. Both issues obviously put a ceiling on the dynamics of the activity.
The EMAE had its smallest annual increase since November 2024
In annual terms, the economy advanced 2.4%, although it was the smallest variation since November 2024. At the sector level, the increases that most explained this growth were those produced by banks (+26.5%) and the category miner-oiler (+9.3%).
At the other extreme, the sectors that had the most downward impact were industry (-5.1%) and the trade (-1.7%). “These data still reflect the scenario of a stagnant and recessive economy,” said Tomás Amerio, economist at the Libertad y Progreso Foundation.
Meanwhile, the constructionanother sector with a lot of weight in the economy, showed an annual increase of 1.5%.
Amerio maintained that “The high uncertainty prior to the elections has generated a drop in consumption and investmentand the exit of savings from the economy, definancing internal demand. “All this has a negative impact on economic activity. If the result of the elections reverses the uncertainty, so will this precautionary attitude of people and companies, giving impetus to the economy again.“, he noted.
Source: Ambito
