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The countryside, mining and Vaca Muerta give the economy a break

2024-03-24T22:24:03.184Z

Highlights: The countryside, mining and Vaca Muerta give the economy a break. A rebound in agriculture is expected after the drought. On the other hand, consumption, Construction and industry will not suffer the same fate. The most lagging sectors were Construction, (-14%), financial intermediation (-8.7%) and the manufacturing industry (-7.5%). Car sales are expected to decline in the domestic market, due to the price increases that vehicles experienced after the devaluation in December.


A rebound in agriculture is expected after the drought. Also in mining, energy through Vaca Muerta and in the knowledge economy, among others. On the other hand, consumption, Construction and industry will not suffer the same fate.


This year, economic activity is expected to follow a "V"-shaped trajectory, economists say: hitting a bottom in the second half of the year and then beginning to recover.

Always with forecasts of a fall in GDP ranging from 2.8% to 5% or more.

In this context,

the behavior of the different economic sectors will not be homogeneous

.

The agricultural sector, after the drought, for example, is seen as the greatest driver.

On the other hand, other sectors - especially those that produce non-essential goods - appear to be the most affected by the situation.

"Despite the cuts in the expected yields of the coarse harvest, a recovery is expected in the

agricultural sector, with an estimated growth for 2024 of 19.2%

," according to the consulting firm Abeceb. This will drive the sale of agricultural machinery (with expected increases of 14.6%) agrochemicals (3.2%) and fertilizers (8%).

This sector, together with

mining, where the estimated increase is 11.1%, and the

oil & gas

sector ,

especially Vaca Muerta (oil 7.4% and gas 4.3%) and

the knowledge economy

, in the Exports of US$ 10,000 million are expected to drive the level of economic activity during the rest of the year.

“These are the sectors that can contribute to the leap in productivity and the supply of foreign currency, although they have limited capacity to generate employment on the scale that the country needs, explain the consulting firm's analysts.

"But at the same time, they are key to the dynamics of regional economies," they clarify.

On the other hand, other sectors of the economy, including those most impacted by inflation, such as

consumption

- for example - will not experience the coming months with too much encouragement.

Abeceb estimates that the loss in

consumption will be 8%

, mainly due to the drop in income and the increase in family costs such as fees, schools, transportation and health, among others.

This has an impact, in turn, on items linked to

mass consumption such as food and beverages

, which according to the consulting firm would fall 0.5%.

And also in retail, with household appliances suffering a decrease of 10.5%.

Specifically, the falls have already begun to be quantified: the latest INDEC report, from January, reported a drop in supermarkets of 13.8%, in wholesale self-service stores, of 81.%, and in shopping malls, a drop of 21%. ,3%.

The reason is basic: given the fall in the purchasing power of salaries,

consumers readjust their consumption, stopping buying certain products that are not essential.

Taking into account all productive branches, the indicator from the consulting firm Orlando Ferreres&Asociados showed

an average drop of 5.6% in the level of activity accumulated in January and February.

The most benefited sectors were agriculture and mining.

And the most lagging behind were Construction, (-14%), financial intermediation (-8.7%) and the manufacturing industry (-7.5%).

The sectors with the greatest difficulties

Car

sales

are expected to decline in the domestic market, due to the price increases that vehicles experienced after the devaluation in December and which motivated the reappearance of financing for the purchase of zero kilometer units by manufacturers.

However, this sector greatly mitigates the decline due to its international insertion.

Another sector that will have a negative impact on the recovery of the economy is

Construction

, with a predicted drop of 11%, according to Abeceb, “since it will not see the light of day in

public works

until the new system of private participation is defined.

This is in addition to other factors such as the lack of financing at competitive rates,” he noted.

According to the consulting firm run by economist Dante Sica, the industry could have a drop of 5.2% due to expectations of exchange rate appreciation.

“It does not have the incentives to take risks that allow it to compete in the global market, companies are waiting and seeing, leaving expansion investments on hold,” he warns.

The Knowledge Economy is aligned with positive expectations due to the competitive exchange rate and estimates of greater exports.

On the other hand, service items such as

logistics, fuel delivery, gastronomy and security,

among others, due to the reduction in demand as a result of the drop in activity in the domestic market, are impacted downwards.

Source: clarin

All business articles on 2024-03-24

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