The lack of dollars, inflation and drought began to have a stronger impact on companies. Thus, after a first quarter with growth, the economy showed a brake in April, which could deepen in the months before the elections due to restrictions on imports and a possible depletion of consumption, according to private studies.
The indicators that analysts are looking at began to color red. To begin with, activity fell by 3.8% year-on-year in April and by 1.8% compared to March, according to Orlando Ferreres' estimate. In its latest report, the consultant pointed out that "agricultural numbers continue to fall and their incidence during this period is higher."
The lower activity is largely explained by the agricultural sector, where agriculture plummeted by almost 50% year-on-year. But among the main sectors there is also the slowdown in the economy: industry showed a contraction of 0.4% in April and trade a decrease of 0.8%, according to the report.
"For the coming months we anticipate a similar trend, with agriculture leading the fall and the rest of the colder sectors. Looking at the second half of the year, uncertainty is very high and the future of activity will depend on the evolution of the macroeconomy and the definitions given in political matters, "said the consultant.
In the same vein, FIEL registered a year-on-year fall of 1% in the industry in April, according to preliminary information. Although the automotive sector recorded the highest levels since 2014, the production of food and beverages had a new fall, although the largest decline occurred in metalworking, chemicals and plastics.
Although compared to March the general index showed a recovery of 4.5%, the foundation warned that the industry makes a "parsimonious cut" in activity, which will depend on the availability of dollars. To stop the decline, Sergio Massa negotiates to extend the swap with China, which only applies to imports from that country, and seeks to unlock financing from Brazil.
But a shortage of foreign currency led in May to impose greater restrictions on foreign freight, automakers and oil companies. "With an extension of the terms in the SIRA, without fluid access to foreign currency and with limits to the external indebtedness of the firms, it is expected a deepening of the deterioration that some specific activities already show," said FIEL.
The latest UIA survey of 477 companies shows that those with falls continue to predominate over those that grew in production, exports, employment and sales to the domestic market. In the latter case, there were 42% with falls and 20% with increases. Thus, the indicator that advances industrial activity was once again in contractionary zone for the fourth consecutive time.
On the other hand, 9 out of 10 companies were affected by the exchange rate run in April.
"During the last months, macroeconomic tensions began to take a more prominent role in the economic situation of companies. The restrictions on imports and the tensions in the foreign exchange market at the end of April, have an impact on the daily operations of companies, with rising costs and increasing pressure on the supply chain, "said the UIA.
Looking ahead to next year, some improvement in the outlook is expected, although they remain at low levels and companies that foresee a worse situation predominate. Another key indicator for the coming months is investment, which in April showed a contraction of 4.2% year-on-year in terms of physical volume (not counting the effect of inflation), according to Ferreres.
"Thus, although inflation discourages saving and encourages consumption, and those who have the possibility accumulate stocks, the process could be running out. In this sense, the outlook for the coming months is not positive, and we anticipate that the contractionary trend in investment will continue," said the think tank.
For this reason, the consultants foresee a fall in activity this year. "All this would imply that activity would contract between 3% and 3.5% in 2023, with a first quarter of slight recovery that will not be sustained in the rest of the year. An abrupt devaluation or a sharp inflationary acceleration could accelerate the fall above 4%," Delphos warned.