The Argentine economy had been showing clear signs of cooling off until December. Construction and industry were not exempt and registered worrying falls in the last month of last year, both in monthly terms in the seasonally adjusted series and year-on-year. In that context, the positive data corresponding to the first month of 2023 are more than welcome.
In particular, construction showed an expansion of 2.6% compared to January 2022. This is the first positive index after three consecutive months of contraction, including a collapse of 10.6% last December. For its part, the seasonally adjusted series showed an improvement of 4.3% compared to the last month of 2022, the first since last July. The information corresponds to the National Institute of Statistics and Censuses (INDEC).
The data is positive, but construction activity is still far from operating at the maximum levels of last year and It remains to be known if this reversal in its evolution is consolidated next month or if it is just an isolated and irregular data in the middle of a negative trend.
- 2,6%
- Year-on-year growth in construction in January 2023.
The manufacturing industry also started the year with encouraging data. In January, and considering the seasonally adjusted series, it showed growth of 0.7% compared to last December. If the original series is taken into account, the growth of the industry with respect to January 2022 was 6.3%. Both increases occur after having registered falls last December.
This growth in the industry is very good news, as occurs in a context of import restrictions that affect the supply of inputs for manufacturing establishments. According to the Undersecretary of Trade Policy and Management of the Ministry of Economy, since the implementation of the SIRA (Argentine Republic Import System) 2% more requests for purchases abroad have been approved compared to the same period of the previous year.
- 6,3%
- Year-on-year growth of the manufacturing industry in January 2023.
Is the recession avoided?
The numbers of economic activity corresponding to last December turned on all the alarms. The INDEC Monthly Estimator of Economic Activity (EMAE) showed a year-on-year drop of 1.2% that month, the first since February 2021. In addition, the seasonally adjusted series showed the fourth consecutive monthly drop in the last month of 2022 (-1%). The last record of an equal streak took place between March and June 2018, with a currency run and a strong devaluation in between.
In this way, activity fell by 1.8% in the last quarter of 2022 compared to the previous one. If a new drop is confirmed in the first three months of this year, it will have entered a recession. The data for industry and construction at the beginning of 2023 are a relief, but there is a great concern: the drought. The agriculture, livestock, hunting and forestry sector was the branch of activity that had the greatest negative impact on the year-on-year drop in the EMAE in December 2022. And 2023 did not start with good news in this regard.
The agriculture, livestock, hunting and forestry sector was the branch of activity that had the greatest negative impact on the year-on-year drop in the EMAE in December 2022. And 2023 did not start with good news in this regard.
According to the Institute of Economic Studies of the Grain Exchange of Buenos Aires, Foreign exchange settlement in agriculture fell by 62% in January compared to the same month of the previous year and was the lowest since 2006. In line with this, exports in January plummeted 11.7% year-on-year and 8.9% seasonally adjusted monthly, due to lower shipments of primary products, INDEC reported.
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