(Bloomberg) – Argentina’s economy grew less than expected in the fourth quarter, but still had its best year since 2004 as the country emerged from a long, deep recession exacerbated by the pandemic.
Gross domestic product rose 1.5% in the last three months of the year from the previous quarter, below economists’ expectations for 1.7% growth. GDP rose 10.3% in 2021, the best performance since the series began in 2004, according to data from the National Bureau of Economic Statistics released on Wednesday.
The unemployment rate fell to 7%, its lowest level since 2015, according to separate official data also released on Wednesday. Private sector wage employment has almost fully recovered from the losses suffered during the pandemic, adding 188,000 jobs last year.
South America’s second-largest economy has recorded annual growth rates of around 10% in recent months as it recovers from a very weak base after a recession that began in 2018. Still, the Consumer prices, which are rising more than 50% a year, have largely eclipsed such gains, prompting President Alberto Fernandez to recently declare “war on inflation”. The central bank raised its key rate to 44.5% on Tuesday.
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Argentina’s recovery accelerated in the second half of 2021, when an accelerated vaccination campaign allowed the economy to reopen safely after months of strict confinement. Investment and public consumption drove growth in the fourth quarter, compared to the previous three months.
Growth should now slow. The government expects activity to grow between 3.5% and 4% this year in a staff-level agreement to reschedule more than $40 billion in debt payments with the International Monetary Fund. But private economists polled by the central bank in February see more modest growth of 3% for 2022, even before factoring in the impact of Russia’s invasion of Ukraine on commodity prices and inflation. .
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