Argentina’s economy contracted in May for the third time this year because the previous salary declines and the increase in unemployment will probably affect consumer spending.
Economic activity fell 0.1% since April, which contrasts with the projections of economists of a growth of the same magnitudewhile April’s positive figure was checked slightly down. With respect to the previous year, the activity expanded 5%, according to official statistics published on Monday.
The retraction of the activity in May is in line with a setback of consumer spending in recent months, since inflation adjusted wages entered into negative field in the previous months.
Although the Argentine agricultural harvest promoted exports and the strong growth of Argentine oil depositsconsumer’s perspectives are still fragile after unemployment in the first quarter reached its highest level in almost four years.
In June, economists cut their growth forecasts for the year to 5% after increasing sustained in the previous months, according to the most recent monthly survey of the Central Bank.
