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Activity indicators confirm that the economy is slowing down


Construction, industry and exports are already registering retractions that will have an impact on GDP.

This week the Government will face several negative indicators that allow us to see that

the slowdown in the economy is beginning to be felt.

This Wednesday, the INDEC will release the data on the trade balance for January, while on Thursday the Monthly Estimator of Economic Activity (EMAE) for December will be released.

"This week the INDEC will disseminate the activity data for December, which would give a fall of 1.5% due to the poor performance of construction, industry and retail sales," they estimate from the LCG consultancy.

And the result of the trade balance for January will also be announced, with a drop in exports close to 10% due to the effect of the drought.


The drought has all the numbers to become the scapegoat for a year that looks bad.

It is seriously fierce and frosts have been added to it in recent days. The effects of the drought are going to be felt in the level of activity , in the flow of dollars and in the collection. A year is coming with high inflation and a low level of activity," says economist Andrés Borenstein.

The data shows that economic activity was bad at the end of 2022. "

The December GDP will show the fourth consecutive month of falling activity

," Borenstein anticipates.

That month, industry contracted 1.2% against November, while construction fell 3.5%.

The latest official data showed year-on-year drops of 2.7% and 10.6% in December.

To this is added that the CAME data reflected a contraction of 0.8% in retail sales.


We expect the activity indicator for the month of December to mark a contraction of around 1.3% per month

without seasonality, which would imply growth of 1.6% per year, closing the year with growth of 5.5% per year average during 2022", points out the LCG consultancy and clarifies that 3.2 percentage points of last year's growth correspond to the statistical drag of 2021.

On the foreign trade side, the news is not encouraging either.

"In this case, we expect January exports to present a meager performance, related to lower foreign sales of cereals, mainly wheat, for which they would be located around US$ 5,000 million in total," says



This would imply

a fall of 9.7% per year

, "which shows the first impact of the historic drought that the country is going through."

On the import side, the consultancy indicates that foreign purchases "would continue to be affected by the low availability of foreign currency and bureaucratic regulations, so we expect them to be around US$5.2 billion, a drop of


% on a year-on-year basis.

If these forecasts come true, the first month of the year would end with

a deficit of US$200 million versus a surplus of US$300 million

observed in January 2022.

From Orlando Ferreres y Asociados they point out that "a recession scenario is possible for the second quarter of the year".

He refers to the fact that, technically, one speaks of a "recession" when there are two consecutive quarters of falling activity.

Estimates from Latin Focus, which brings together the forecasts of 40 consultancies, forecast

a contraction in activity of 0.1% this year

, well below the official estimate that forecasts a 2% rise.

Unlike what happened in 2022,

this time there will be no statistical drag that plays in favor of GDP expansion


This occurs because the last quarter of last year was very weak, so that the expansion of the GDP will be tied only to what happens throughout 2023.

With exports weakened by the drought, the other great driver of activity,

consumption, will also have a limited performance

due to lower job creation and the slim chances that wages will beat inflation that will be close to 100%.


look also

Argentine bonds continue to fall on Wall Street and sink up to 3.5%

The prices of imported products accelerate due to the obstacles and the gap of the dollar

Source: clarin

All business articles on 2023-02-22

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