Argentina’s economy grows a robust 11.9 percent in third quarter | Business and Economy News

The South American nation has seen its economy recover more quickly than expected after taking a big hit from COVID-19.

Argentina’s economy expanded 11.9 percent on a year-on-year basis in the third quarter of 2021, the country’s statistics agency said on Thursday, in line with expectations of a sharp rebound from the 10.2 percent contraction in the same period last year.

The South American grains-producing nation has seen its economy recover more quickly than initially expected after taking a big hit from the COVID-19 pandemic, with the government nudging up its annual growth forecast for 2021 to around 10 percent.

A Reuters News Agency poll of 17 local and foreign analysts had predicted a median 12 percent expansion for the July-September quarter.

“In the third quarter, a recovery in consumption stood out,” said Isaías Marini, an economist at consultancy Econviews, who had forecast a 12 percent rise and expected the recovery to last into the final quarter of the year as salaries picked up.

“The salary improvements, recent easing [of restrictions] and the reactivation of credit suggest the year will end even above 10 percent,” Marini said. “But short-term risks are the scarcity of reserves to finance growth, and the consequent exchange rate instability.”

Pablo Besmedrisnik, an economist at consulting firm Invenómica, said, “One of the biggest drivers today comes from the extractive activity of oil and fuel production. The agricultural sector is also showing a good performance and outlook.”

“The two sectors,” said Besmedrisnik, “are key to getting the foreign exchange Argentina needs in the short and medium term.”

The South American nation posted a 17.9 percent gross domestic product rise in the second quarter of 2021.