Thursday, March 30, 2023

Argentine industrial activity grows barely 0.7% in January

Industrial activity in Argentina registered an advance of barely 0.7% last January compared to last December, official sources reported on Wednesday.

According to the data published by the National Institute of Statistics and Censuses (Indec), manufacturing activity advanced 6.3% in the first month of the year compared to the same month of 2022, after the 2.7% year-on-year drop registered last December.

In January, fourteen of the 16 industrial branches presented year-on-year improvements, among which food and beverages (9.1%), steel (8.9%) and automobiles (24.8%) stood out.

Meanwhile, among the year-on-year falls, that of the chemical industry stood out, with a decline of 4.5%.

As observed in a report by the consulting firm Orlando Ferreres & Asociados, the year-on-year rebound verified in January was more related to the “weak start” that had been observed in January 2022 “than to a real improvement” in industrial activity during the first month. of 2023.

In 2022, the Argentine industry grew 4.3%, showing a sharp slowdown compared to the 15.8% expansion achieved in 2021, and this loss of vigor could deepen in 2023, according to the forecasts of various private consultants.

“For the coming months, our base scenario anticipates a downward path for the progress of industrial activity, affected by lower domestic demand, lack of foreign currency, and a very fragile and politically uncertain macroeconomic context,” Orlando Ferreres & Asociados warned.

In the same sense, the Latin American Economic Research Foundation (FIEL) observed in a report that “short-term prospects continue to show the shortage of foreign currency as the main obstacle to the development of industrial activity.”

He also pointed out that the indebtedness of industrial firms with their foreign suppliers and their parent companies to be able to import inputs, parts and pieces has reached a level that “seems unlikely to be expanded”, at a time when Argentina maintains strong restrictions on access to foreign currency to import as a strategy to meet their monetary reserve accumulation goals.


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