In any case, beyond starting the year with positive numbers, projections for the coming months are not encouraging. Some private surveys report a retraction in February and some analysts forecast a drop in the level of activity for this year. Drought, lack of dollars and inflationare some of the factors that can affect the progress of the economy.
As reported by INDEC, on January 14 of the activity sectors that make up the EMAE registered increases, among which Fishing (+81.2% yoy), Mining and quarrying (+11.5% yoy) and Hotels and restaurants (+8.6% yoy) stand out. The Manufacturing Industry sector (+7.1% yoy) was the one with the greatest positive incidence in the interannual variation of the EMAE, followed by Wholesale, retail and repair trade (+5.2% yoy).
For his part, the Agriculture, livestock, hunting and forestry sector (-15.5% yoy) was the only one that registered a drop compared to a year agosubtracting 0.7 percentage points from the interannual variation of the indicator.
What is expected in the future
Beyond the growth registered in January, the projections for the coming months are not very encouraging. Lautaro Moschet, economist at the Libertad y Progreso Foundation, reviewed some of the “difficulties that are occurring this year in the activity”: “The most obvious is the drought, whose losses derived from the production of soybeans, wheat and corn amount to US$19,000 million., according to the Rosario Stock Exchange. This, in turn, has repercussions on closely related sectors, such as transport”.
“Over the months, the fall in exports will make the shortage of reserves that the Central Bank has more and more evident and will further deepen import restrictions. This is where the second complication appears that will slow down growth. Imports of capital goods and intermediate goods exceed 50% of total purchases abroad. If fuels and accessories for capital goods are added to this, the participation exceeds 80%. With this it is evident that, to the extent that imports are restricted, the industry will be strongly affected and will not be able to grow either”Moschett added.
In fact, some of these impacts would have already been reflected in February. For example, according to the General Activity Index that the Orlando consultancy measures ferrereslast month registered a drop of 0.7% year-on-year and a drop of 0.1% compared to January. “The agriculture sector is by far the biggest negative drag, with a fall of 21.6%, framed in the disaster that caused the drought in the main crops of the sector,” they highlighted from the firm.
Regarding what may happen in the future, they highlighted: “For the coming months there are no signs that allow us to be optimistic; the climatic factor added to the lack of dollars and the macroeconomic collapse, together with a government without fiscal space and a contractive private consumption lead us to anticipate that 2023 will be a recessive year”.
Along the same lines, from LCG they projected: “By 2023 we expect activity to be negatively affected by a series of variables. In the first place, due to the most severe drought in decades, which would mean a decrease of the order of US$15,000 million in exports, which would be correlated with a lower availability of foreign currency for imports”.
“For this reason, the conditioning on the operation of the industrial sector would be more palpable than last year. On the other hand, with inflation that continues to be high and navigates at rates of 105-110% per year, it is difficult to expect a recovery in wages and, with it, in consumption. Likewise, in the midst of an electoral campaign, we are not optimistic that investment will be a factor that will drive activity this year. In summary, we project a fall of around 3.8% per year on average”, they remarked from the firm.
Source: Ambito
