Economic activity in August registered a 3.8% drop when compared to the same month of last year, the Monthly Estimator of Economic Activity (Emae, for its Spanish initials) report revealed. The brief revealed that the accumulated economic drop so far in 2024 is 3.1% compared to 2023.  

The data also showed a slight recovery in August, registering a 0.2% seasonally adjusted growth. 

The July Emae report had shown a 2.1% seasonally adjusted growth — the highest of 2024 — and a year-to-year drop of 0.9%. The National Institute of Statistics and Censuses (Indec, for its Spanish initials) published the report on Wednesday.

Around ten sectors registered drops compared to August of last year. The most affected was construction (-18%) and the sector encompassing wholesale and retail commerce, as well as repairs (-7.9%). Also included in this list are hotels and restaurants (-4.1%), taxes and subsidies (-5.2%), and manufacturing (-6.7%). 

In turn, only five sectors grew in August, the most notable ones being fishing (+17.1%) and mining and quarrying (+6%). Among those that also registered an uptick were agriculture, livestock, hunting, and forestry (+4.5%) and electricity, water, and gas (+1.6%).

What to expect in the coming months?

Consulting firms foresee a “slow” recovery of economic activity. Orlando J. Ferreres pointed out that this recovery may come with “eventual downward fluctuations.”

“We’re expecting a slow activity recovery over the next few months, even with possible downward fluctuations like the current one. A firmer expansion path will be reached when income recovers in a more orderly macroeconomic context that generates confidence, which we expect will happen over the next year”, Ferreres stated in his last General Activity Report, which in August showed a 0.6% monthly drop and a 5.6% year-on-year drop.

On the other hand, economist Claudio Caprarulo from Analytica explained that his activity projection “showed a very slight recovery for the third quarter of the year compared to the second quarter, with an increase also in the fourth quarter.” However, he emphasized that even year-on-year variation will continue the negative trend.

“Although the level of activity is still below what was registered last December, we project to close the year with figures higher than what we saw at the end of 2023”, highlighted Lautaro Moschet from Fundación Libertad y Progreso.

Finally, economist Alejandro Giaccoia of Econoviews stated that they expect September to be a “positive” month based on the indicators they were able to gather. He argued that “the recovery of real wages and credit for the private sector are two points that help.”

However, he stressed that the outlook for 2025 will depend on if the currency exchange restrictions — known as cepo — are lifted.   

“The outlook is different if we spend most of 2025 with or without the cepo, although we expect it to be a positive year,” he said.

Originally published in Ambito