June economic activity data another blow for embattled Macri
Economic activity in Argentina flatlined in June after expanding 2.4% in May, as economic storm clouds once again gather over the country.
Activity grew 0.0% year-on-year in the month, but contracted 0.4% in seasonally adjusted terms, according to data from statistics agency Indec.
In June the economy was propped up by the farming sector, where activity surged 43.7% year-on-year. The extractive industries and transport segments eked out sub 2.0% growth, but activity in the financial intermediation sector fell 15.1%.
Over the first half of the year, overall activity declined 2.6%.
ALSO READ: The BNamericas Political Risk Report: Who will govern Argentina?
The June reading, although technically not a contraction, will offer little comfort for embattled business-friendly President Mauricio Macri, who is expected to lose October's presidential elections after being pummeled in the recent primaries, which sparked turmoil in the local markets.
Some forecasters project the fallout from the shock election result will deepen the economic contraction expected this year.
Following the primary elections, won by Peronist Alberto Fernández and his populist running mate Cristina Fernández-Kirchner, the peso plunged and interest rates – already high and weighing on investment – rose.
Rating agency Fitch forecasts a contraction of 2.5% for this year, down from a prior estimate of negative 1.7%. Fitch says growth could reach 0% in 2020, citing a “high degree of uncertainty given lack of clarity around key economic policies post-election.”
Macri, pictured, had been working to put the fragile economy on a more stable footing and in the months before the primaries some analysts said the economy had hit bottom. Argentina was knocked into an economic tailspin in 2Q18 by a perfect storm of factors, including a drought and capital outflows.
Alberto Fernández, meanwhile, has tried to allay investor fears as the focus shifts to what he may do on the policy front if he succeeds in October.
“I'm not an economic dogmatist,” Fernández said earlier in the week. “I’m not a Keynesian or a liberal. I'm an economic pragmatist. There are times at which the economy can be fixed by Keynesian measures and moments in which more freedom is the solution.”
Whoever wins will inherit a weak economy and a large federal government debt pile, the bulk of which is denominated in dollars. British research firm Capital Economics said a sovereign debt default is "now more likely than not."
Subscribe to the leading business intelligence platform in Latin America with different tools for Providers, Contractors, Operators, Government, Legal, Financial and Insurance industries.
News in: Petrochemicals (Argentina)
At a Glance: How Bolivia plans to deal with the oil price crash
The country's state hydrocarbons company expects that the oil price tumble will have an impact of around US$700mn on Bolivia in terms of gas export...
Argentina offers US$38bn haircut to bondholders
The government’s offer also included a US$3.6bn haircut on capital holdings and a three-year “grace period.”
Subscribe to Latin America’s most trusted business intelligence platform.
Other projects in: Petrochemicals
Get critical information about thousands of Petrochemicals projects in Latin America: what stages they're in, capex, related companies, contacts and more.
- Project: Expansion and upgrade of the aromatics train at La Cangrejera petrochemical complex
- Current stage:
- Updated:
2 years ago
- Project: Petrochemical plant of the Supremo Sueño de Bolívar industrial complex (CIESSB)
- Current stage:
- Updated:
3 years ago
- Project: Polimérica
- Current stage:
- Updated:
3 years ago
- Project: South Propylene (Propilsur)
- Current stage:
- Updated:
3 years ago
- Project: Trinidad methanol dimethyl-ether plant
- Current stage:
- Updated:
3 years ago
- Project: PET petrochemical plant
- Current stage:
- Updated:
3 years ago
- Project: Linear alkylbenzene (LAB) petrochemical plant
- Current stage:
- Updated:
4 years ago
- Project: Methanol petrochemical complex
- Current stage:
- Updated:
4 years ago
- Project: Gran Chaco ethylene and polyethylene plant
- Current stage:
- Updated:
4 years ago
- Project: Green Polypropylene Plant
- Current stage:
- Updated:
4 years ago
Other companies in: Petrochemicals (Argentina)
Get critical information about thousands of Petrochemicals companies in Latin America: their projects, contacts, shareholders, related news and more.
- Company: Carboclor S.A.  (Carboclor)
-
Argentine petrochemical company Carboclor S.A. produces and trades chemical, petrochemical and petroleum products, and also supplies stevedoring, logistics and warehousing servi...
- Company: IECSA Chile S.A.
- Company: IECSA Brasil Ltda.
- Company: ODS S.A.
- Company: Asociación Petroquímica y Química Latinoamericana  (Apla)
-
Asociación Petroquímica y Química Latinoamericana (Apla) is a non-profit organization with over 120 member companies that was founded in 1980 to promote and facilitate the susta...
- Company: Subsecretaría de Desarrollo de Inversiones y Promoción Comercial
-
Within the country's foreign ministry, the Subsecretaría de Desarrollo de Inversiones y Promoción Comercial is a state entity that devises strategies for, and supports, internat...
- Company: Grupo Ceibo, S.A.  (Grupo Ceibo)
-
Grupo Ceibo S.A. is an Argentinean business conglomerate established in 1999 in Buenos Aires as Grupo Indalo S.A., controlled by the local entrepreneur Cristóbal López. Grupo Ce...
- Company: Petrobras Argentina S.A.  (Petrobras Argentina)
-
Petrobras Argentina, formerly Petrobras Energía S.A., is an integrated energy company engaged in upstream and downstream operations (including oil and gas E&P, refining, marketi...