Despite recent economic data showing Argentina’s recession remains far from over, government officials are sticking to forecasts the economy will expand in 2017 at its fastest rate in six years.
This week, Finance Minister Alfonso Prat-Gay said Argentina’s economy will grow by 3.5% next year, when President Mauricio Macri will also face mid-term congressional elections that could determine the president’s ability to push forward with his economic reform agenda.
“We have a projection of 3.5% growth next year,” Prat-Gay said in comments to Argentine radio station La Red. “In general, it’s a projection shared by almost all economists and consultants. There are even economists from the opposition who expect higher numbers.”
However, some Wall Street economists have lower projections. Last month, Goldman Sachs said it sees Argentina’s economy, Latin America’s third-largest, growing 2.7% in 2017. And a central bank survey of economists released earlier this month showed expectations for growth next year of 3.0%, down from 3.2% in the previous survey.
Macri had said he expected Argentina’s economy, which has contracted for three straight quarters, to rebound in Q4 this year. However, several recent economic indicators showed little signs of a recovery. In October, industrial production shrank 8% from a year earlier, according to Argentina’s statistics agency. Construction also fell 19%.
But Prat-Gay said he was encouraged by some indications the economy might be beginning to stabilize. In the interview, Prat-Gay said the agriculture sector is starting to show signs of reactivation. He also said construction activity in November was up compared to last year and pointed to preliminary data indicating auto production rose in November for the first time in 20 months. Auto exports also rose, he said.
Official data for November has not been released yet.