In May, Argentina’s economy experienced a contraction for the third time this year, driven by prior wage declines and increasing unemployment, which likely exerted pressure on consumer spending.
Economic activity experienced a decline of 0.1 percent from April, falling short of economists’ expectations for growth of a similar magnitude, while the previously reported positive figure for April was adjusted downward slightly. According to government statistics published Monday, the economy has experienced an expansion of five percent compared to a year ago.
The decline in May activity corresponds with a recent downturn in consumer spending, as inflation-adjusted wages entered negative territory earlier this year. Despite the agricultural harvest in Argentina propelling exports and significant growth in oil fields, the consumer outlook appears precarious, as unemployment in the first quarter has reached its highest level in nearly four years.
In June, analysts revised their growth projection for the year down to five percent, following a period of consistent upward adjustments in prior months, as indicated by the Central Bank’s latest monthly survey.