Record drought pushes Argentina back into recession
Argentina's Statistics Bureau (INDEC) reported that economic activity in the country fell again in May - albeit at a much slower rate than in April, posting a monthly drop of only 0.1%.
But compared to May 2022, activity was 5.5% lower - pushing GDP to its lowest level in 16 months, and representing the sharpest year-on-year fall in 31 months.
It was the second consecutive monthly drop for Argentina's economy, the third-largest in Latin America and 23rd in the world, after monthly GDP fell 1.8% in April (and 4.4% from April 2022).
In both monthly readings, agriculture accounted for virtually the entire downturn - with annual GDP slipping 0.4% in April and rising 0.3% in May but for that sector.
A record drought - the worst since 1929 - pushed agricultural output down 37% in April and 43.8% in May, costing the severely indebted country's coffers an estimated $20 billion in foreign exchange.
The nation's GDP, however, remains 5% above December 2019 levels, when current President Alberto Fernández took office on the heels of a foreign debt bubble crash known as the "Macrisis" - a reference to his right-wing predecessor, Mauricio Macri.
Fernández's Economy Minister, Sergio Massa, is currently in Washington negotiating repayment terms with the International Monetary Fund (IMF) over a record, $45 billion bailout granted to Macri during his failed re-election campaign - reportedly at the insistence of then-President Donald Trump.
At: https://www-baenegocios-com.translate.goog/economia/El-impacto-de-la-sequia-continuo-en-mayo-y-el-PBI-siguio-en-baja-20230718-0049.html?_x_tr_sl=es&_x_tr_tl=en&_x_tr_hl=en-US&_x_tr_pto=wapp
A harvester collects soy in eastern Argentina's fertile Pampas region.
A record drought - the worst since 1929 - has cost the country's coffers an estimated $20 billion in foreign exchange so far this year, bringing a strong 2021-22 recovery to a halt and jeopardizing the country's ability to service its $190 billion public foreign debt.
Argentina's public foreign debt doubled under right-wing President Mauricio Macri in 2015-19 - an estimated 80% of which went to finance asset dollarizing and offshoring by both local elites and foreign speculators.
