The economy of Argentina contracted 4.2 percent year-on-year in the second quarter of 2018, matching expectations and compared to an upwardly revised 3.9 percent expansion in the first quarter. It was the sharpest decline since the third quarter of 2014. Output contracted mostly in: agriculture (-31.6% vs 1.4% in Q1) after one of the worst droughts in years affected production of soy and corn; fishing (-13.7% vs 13.2%); manufacturing (-1.8% vs 3.7%); wholesale and retail trade (-1.6% vs 6.0%) and transport and communications (-3.8% vs 1.0%). In contrast, financial activity accelerated (8.7% vs 5.8%). On the expenditure side, private consumption slowed (0.3% vs 4.3%) while government spending (-2.1% vs -1.2%) and fixed investment (-7.5% vs 6.4%) declined. Also, exports fell 7.5 percent (vs 6.4% in Q1) while imports rose 2.7 percent (15.6% in Q1). On a quarterly basis, GDP shrank 4.0 percent after a downwardly revised 0.7 percent expansion in the first quarter. GDP Annual Growth Rate in Argentina averaged 2.54 percent from 1994 until 2018, reaching an all time high of 16.20 percent in the second quarter of 2010 and a record low of -16.30 percent in the first quarter of 2002.
GDP Annual Growth Rate in Argentina is expected to be -3.40 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate GDP Annual Growth Rate in Argentina to stand at -1.80 in 12 months time. In the long-term, the Argentina GDP Annual Growth Rate is projected to trend around 2.30 percent in 2020, according to our econometric models.