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Argentine industry achieves slight rebound, despite import restrictions

Buenos Aires, Oct 6 (EFE). – The industrial activity of Argentina achieved a slight rebound last August, despite the restrictions on imports imposed by the Government, a difficulty not yet resolved and that reinforces the forecasts of a further slowdown in manufacturing production for the remainder of the year and for 2023. As reported this Thursday by the National Institute of Statistics and Censuses (Indec), industrial activity registered last August an advance of just 0.4% compared to last July, when the indicator had recorded a contraction of 0, 7%. In August, the Argentine economy and industry, in particular, continued to be affected by restrictions on access to foreign currency to pay for imports, which has limited access to production goods, although the financial and business climate, so shaken in July, lowered his tensions. In year-on-year terms, manufacturing activity advanced 7.6%, the seventh consecutive rise in the industrial indicator. “These are positive indices for August, which continue to show that we are on the path of growth in Argentina,” the spokeswoman for the Argentine Presidency, Gabriela Cerruti, said at a press conference on Thursday. According to official data, in the first eight months of the year, industrial activity accumulated growth of 6.1%, showing a sharp slowdown compared to the rate of recovery of 19.9% ​​accumulated in the same period of 2021. UNDER RESTRICTION Industrial activity of Argentina had registered a growth of 15.8% in 2021, ending three years of falls amid the economic recession aggravated by the pandemic. But now that the third quarter is over, it is clear that 2022 will end as a year of slowdown in manufacturing production. “For the industry we expect a path similar to that shown by general economic activity,” Eugenio Marí, Chief Economist of the Fundación Libertad y Progreso, told EFE. According to the expert, although in the first semester the expansion of the industrial sector was higher than expected, in the second half of the year “restrictions to growth” began to become evident. Due to the need to accumulate monetary reserves in a context of dollar scarcity, at the end of June, Argentina deepened the restrictions on access to foreign currency to pay for imports, including those of goods for production. This had an impact on industrial production, due to lack of inputs and higher costs. Restrictions on access to foreign currency, although with some flexibility in certain key industrial branches, are maintained, while the Government recently determined greater customs controls on imports, especially “superfluous” imports, in order to give way to those oriented towards production. . “In industry, the difficulties arising from the exchange rate trap are especially notable. On the one hand, the lack of access to supplies is being felt more and more, paralyzing various branches of activity. On the other, an artificially backward exchange rate hinders competition of local industrial producers,” said Marí. LOSING VALUE According to the 2023 Budget project presented in September by the Government, the Argentine economy would close 2022 with an accumulated growth of 4%, while the industry would register an annual expansion of 2.5%. In 2023, the Argentine economy would cut its growth to 2%, while the manufacturing industry would do so to 1.5%, according to official projections. But private forecasts for the Argentine economy in 2023 are even less optimistic. “As for 2023, the scenario is especially complex. We expect the GDP to fall by more than 2%, while inflation will be comfortably in the three-digit range,” said Marí. According to the economist, “with growing union conflict and greater uncertainty, the industry will surely erode much of the expansion it has accumulated in recent months.” Natalia Kidd (c) Agencia EFE

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