Itaú BBA - ARGENTINA – Activity falling before coronavirus outbreak

Macro Latam

< Voltar

ARGENTINA – Activity falling before coronavirus outbreak

Março 30, 2020

We forecast a GDP contraction of 4.4% for 2020.

Activity contracted in January. The EMAE (official monthly GDP proxy) fell by 1.8% yoy, slightly below market consensus expectations of -1.7%, according to Bloomberg. On a sequential basis, the index decreased by 0.1% mom (+0.4% in December), taking the quarter-over-quarter contraction to 4.8% annualized (from -3.9% in 4Q19).

Activity declined across all sectors during the quarter ended in January. Construction led the downturn with a drop of 10.1% in the quarter ended in January, from -8.3% in 4Q19. Manufacturing fell by 1.9% in the period (from -2.1% in the last quarter of 2019) and Services contracted by 0.7% yoy (from -0.8% in 4Q19), hit by lower real earnings. Agriculture, Mining and Fishing retreated by 1.1% yoy in the quarter ended in January, from +0.6% in 4Q19. 

All sectors with the exception of Services fell on a sequential basis in January, according to our seasonal adjustment. The Construction sector plummeted by 26.8% qoq/saar, following a 26.9% decrease in 4Q19. Primary activities fell by 12.4% qoq/saar, from -15.1% in 4Q19. Manufacturing output decreased by 5.4% qoq/saar in January, from -6.9% in December. Finally, the Service sector gained 1.5%, following 1.0% qoq/saar growth in 4Q19.

We forecast a GDP contraction of 4.4% for 2020, due to the negative effects of measures to control the outbreak of the COVID-19 pandemic. We expect a severe contraction in 1H20, followed by a normalization of output in the second half of the year.
 

Juan Carlos Barboza
Diego Ciongo

 



< Voltar