Argentina’s economy rebounds strongly in third quarter


Grain is loaded aboard ships at a port on the Parana River near Rosario, Argentina August 28, 2020. REUTERS/Agustin Marcarian/File Photo

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BUENOS AIRES, Dec 16 (Reuters) – Argentina’s economy grew 11.9% year-on-year in the third quarter of 2021, the national statistics agency said on Thursday, in line with expectations of a sharp rebound from the contraction in 10.2% the same period last year.

The grain-producing South American nation has seen its economy recover faster than initially expected after being hit hard by the COVID-19 pandemic, as the government raised its annual growth forecast for 2021 to around 10%.

A Reuters poll of 17 local and foreign analysts had predicted a median expansion of 12% for the July-September quarter.

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“In the third quarter, a recovery in consumption stood out,” said Isaías Marini, an economist at consultancy Econviews, who had forecast a 12% rise and expected the recovery to last until the last quarter of the year with rising wages.

“Wage improvements, the recent easing (of restrictions) and the reactivation of credit suggest that the year will end even above the double digits. But the short-term risks are the scarcity of reserves to finance growth and the resulting exchange rate instability.”

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“One of the main drivers today comes from the extractive activity of oil and fuel production. The agricultural sector is also showing good performance and good prospects,” said Pablo Besmedrisnik, economist at the consulting firm Invenómica.

“Both sectors are essential to obtain the currencies that Argentina needs in the short and medium term.”

The South American nation recorded a 17.9% rise in GDP in the second quarter of 2021.

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Reporting by Hernan Nessi; Editing by Adam Jourdan, Kirsten Donovan and Paul Simao

Our standards: The Thomson Reuters Trust Principles.

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