“After having chained a whole quarter of consecutive increases, we expect activity to reflect a contraction in July (around 1% monthly) based on the high degree of uncertainty caused by the resignation of Martín Guzmán, which triggered the price of free dollars upwards”, they pointed out from the LCG consultancy.
The firm highlighted, in this sense, that “Different indicators of progress were in this line: there was a fall in industrial production of 1.2% monthly sa, 2.7% sa in retail consumption and 6.1% in electricity consumption. In contrast, construction marked an increase of 2.2% monthly, but it will not be enough to offset the total negative effects given the relative weight of the sector in the total”.
For its part, the ITE (Work and Economy Institute) of the Germán Abdala Foundation anticipated in its Monthly Activity Index (IMA), that a contraction of 2.5% is expected compared to June. “Although it is premature to think of a new recessive episode, it seems clear that the economy entered a situation of stagnation”, they underlined from the signature.
In the year-on-year comparison, however, the economy “it increased by 3.7%”. “The dynamics of the last month reflects a disparate trend in the components of the IMA. While cement shipments, commercial loans, diesel consumption, social security collection, imported amounts and the FIEL industrial production index maintain annual growth, the demand for electricity, exported amounts and retail sales are gaining ground negative. This latest signal is an early warning of a clear slowdown in the economy starting in July”, they added from ITE.
For its part, in the monthly report prepared by the consulting firm Orlando Ferreres, it was highlighted that “Economic activity has halted its growth in recent months, and shows clear signs of stagnation”. “Thus, the July record of a decrease in the seasonally adjusted series of 0.3% per month leaves the index 1% below the level exhibited at the end of last year. Among the few sectors that drive growth, construction stands out, with an expansion of 10.6% for July, and extractive activities, which rose 10.2%”, they underlined.
“For the rest of the year, although the risks of further macroeconomic decline remain high, volatility has decreased. Anyway, there is no room to expect an improvement in the indicators and the adjustment process itself will restrict the development of the activity”, they added from Ferreres.
Second semester
Precisely, when analyzing what can be expected for the second part of the year, from LCG they analyzed in their weekly report: “We project a slowdown in the level of activity, considering growth of around 3.5% on average in 2022, similar to the statistical drag left by 2021”.
“This is explained by a slowdown in consumption due to the erosion of real wages as a result of high inflation, and a drop in government spending in order to meet the fiscal deficit goals. Investment can hardly continue to drive at the rate it has done so far, in the midst of an uncertain scenario in political terms and with greater restrictions (imports) and relative price imbalance.
For his part, the Equilibra economist Lorenzo Sigaut Gravina pointed out to Ámbito: “Import supply problems, purchasing power of salaries that does not reach inflation and a more contractive economic policy, with greater fiscal adjustment and interest rates that are increasingly ever closer to inflation, means that what we expect in the second half is an activity that falls on the margin. In any case, the year will end with significant growth, just below the 4% expected by the Government as reported in the Budget”.
In this regard, the Secretary of Industry and Productive Development, Jose Ignacio de Mendigurennoted that the Government is busy “getting the dollars that the country needs to continue growing with concrete measuresthat they give fiscal relief to the sectors that generate additional dollars to those they had been generating”, such as the automotive industry, the oil sector and the agri-food chain, among others.
“The objective is to sustain the level of activity and that is why we are busy looking for the dollars that the productive system needs to continue growing. This year we aim to exceed US$90,000 million in exports and have a favorable trade balance of between US$12,000 and US$13,000 million,” the official said in radio statements.
Source: Ambito
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