Itaú BBA - ARGENTINA – GDP rebounds in 3Q20 following the easing of lockdowns

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ARGENTINA – GDP rebounds in 3Q20 following the easing of lockdowns

December 16, 2020

We recently raised our 2020 GDP growth forecast to -11% from -12%

Argentina’s GDP posted a sequential recovery in 3Q20 as mobility restrictions started to be lifted. Output increased by 12.8% qoq/sa in 3Q20, partially reversing the 16.0% decline registered in the previous quarter. On a year-over-year basis GDP contracted by 10.2%, after declining by 19.0% in 2Q20, generating a statistical carryover of -10.9% for 2020. 

 

Domestic demand (seasonally adjusted) increased in 3Q20 following the easing of social distancing measures but continued to fall on a year-over-year basis. Domestic demand (excluding inventories) increased by 13.4% qoq/sa but decreased by 12.8% yoy. Gross fixed investment dropped by 10.3% yoy in the quarter, while private consumption retreated by 14.7% yoy and public consumption declined by 6.5% yoy. Imports fell by 22.0% yoy, while exports decreased by 17.0% yoy, affected by a sharp decline in industrial exports. At the margin, gross fixed investment increased by 42.9% qoq/sa, followed by gains of 10.2% in private consumption and 2.7% in public consumption. External demand made a negative contribution at the margin, as exports fell by 1.4% qoq/sa, compared with a 10.9% increase in imports.

We recently raised our 2020 GDP growth forecast to -11% from -12%. For 2021, we still expect modest 4.5% growth, as exchange-rate controls and declining confidence will likely remain drags on the economy.

Juan Carlos Barboza
Diego Ciongo



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