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ECONOMY | 26-07-2019 16:41

Argentine economy grows 2.6 percent in May due to boost from harvest

The positive figures broke 12 consecutive months of economic recession and is a major victory for president Macri who faces a tight reelection campaign.

Twelve consecutive months of negative growth came to a halt in May when economic activity grew 2.6 percent compared to May of last year, and 0.2 percent compared to April, as a result of the agricultural harvest, according to a report released Thursday by the National Institute of Statistics and Census (INDEC). 

The economy descended into recession in 2018 and was down 3.1 percent compared to last year for the first five months of 2019, according to Indec. 

GDP fell 2.5 percent last year. The International Monetary Fund (IMF) adjusted its estimate for this to a fall of 1.3 percent after initially projection a reduction in GDP of 1.3 percent. 

Agriculture production was exceptionally high, showing a 49.5 percent difference year-on-year, which explains the strong economic indicator. Almost all sectors of industry and commerce continued to shrink.

Farmers harvested 156 million tons of grain and oilseeds, a record according to the secretary of Agro Industry. 

“Looking forward, it is expected the agricultural campaign, which unlike 2018 enjoyed good weather conditions, will continue to contribute to growth,” the ministry said, 

Transportation and communications and education also showed positive growth compared to April of last year.

The government and Central Bank are coordinating measure to prevent future rises in inflation and other shocks that would affect the reelection chances of president Mauricio Macri in October.

The report was good news for Macri whose approval rating had suffered due to the relentless recession. 

- TIMES/AFP

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