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Our GDP growth forecast for this year stands at -3.0%.
2024/06/24 | Andrés Pérez M., Diego Ciongo & Soledad Castagna

GDP fell in 1Q24 by 5.1% yoy, below the anticipated data by the monthly GDP proxy (EMAE: -5.4% yoy), reflecting the effects of the stabilization program. On a sequential basis, GDP contracted by 2.6% QoQ/SA, following a contraction of 2.5% in 4Q23. Thus, the statistical carryover for 2024 stood at -3.9%.



Final domestic demand fell by 4.2% QoQ/SA in 1Q24. Private consumption contracted by 2.6% QoQ/SA, while public consumption dropped by 0.8%. Fixed investment plummeted sequentially by 12.6% in the quarter. On an annual basis, domestic demand (excluding inventories) declined by 9.5% yoy, reflecting a 6.7% yoy contraction in private consumption and a drop of 5.0% in public consumption. Gross fixed investment plummeted by 23.4% in the period. Regarding external demand, exports increased by 26.1% yoy, supported by the normalization of the agriculture sector after last year’s severe drought, while imports dropped by 20.1% yoy affected by a weaker currency.



Our take: Our GDP growth forecast for this year stands at -3.0%. Following the sharp contraction in economic activity in 1Q24, all eyes are now on the pace of the recovery. Some leading indicators point to an early improvement in 2Q24, while the normalization of the agricultural sector also should support a gradual recovery of the output.