Argentina's economy contracts 1st time in 3 years, shrinking 4.9% in Q2

By Ovunc Kutlu

ISTANBUL (AA) - Argentina's economy shrank 4.9% annually in the second quarter, contracting for the first time since 2020, according to data by the national statistics agency.

The expectation for the figure was to show a contraction of 4.8%, while the South American economy annually expanded 1.3% in the first quarter.

The economy shrank 2.8% in the April-June period, compared to the preceding three months.

The agricultural sector shrank the most, 40.2%, from the same period last year, according to figures released Tuesday by INDEC.

While exports fell 4.1% during the second quarter, imports increased 3.7%.

Annually, exports plummeted 10.9%, while imports rose 4.3% in the April-June period.

Annual inflation jumped to 124.4% in August, its highest since 1991, after climbing to 113.4% in July.

The central bank last week held its benchmark interest rate unchanged at 118%.

Banco Central de la Republica Argentina raised the interest rate by 600 basis points to 97% on May 15, following a rate hike of 1,000 basis points to 91% on April 27 and 300 basis points to 81% on April 20.