Argentina economic activity seen sliding in October year-on-year

By Hernan Nessi

BUENOS AIRES (Reuters) – Economic activity in Argentina likely fell in October versus the same month a year earlier, a Reuters poll of market analysts showed on Wednesday, although they also forecast the possibility of month-on-month growth.

The median forecast from 12 analysts sees economic activity shrinking 2.5% year-on-year in October, the fifth consecutive month of year-on-year contraction.

Estimates ranged from a forecast for a 4.4% contraction to 0.7% growth.

Despite the anticipated year-on-year drop, economic activity may have grown in October compared to September, according to the analysts.

A year ago, Argentina’s economy was “overstimulated” due to higher public spending in the run-up to the country’s elections, affecting the year-on-year comparison, said economist Alejandro Giacoia from Econviews consulting firm.

Month-on-month data meanwhile shows economic activity growth bottoming out around April, said Giacoia.

“It is quite clear there is a certain rebound, although it is not yet so palpable in the streets,” the economist said.

Consulting firm ABECEB also forecast economic activity to grow in October compared to September.

“Tax collection, imports, electricity demand, consumption indicators and also car production and car registrations had positive data in the tenth month of the year,” ABECEB said.

Looking ahead to coming months, analysts expect economic activity to begin to show signs of greater recovery.

“The recovery of wages in a context of a strong deceleration of inflation will help recompose domestic demand, hand in hand with the growth of consumer credit,” said the consulting firm Orlando Ferreres & Asociados.

Argentina’s INDEC statistics agency is scheduled to publish economic activity data for October on Friday afternoon (19:00 GMT).