Argentine Economy Contracts First Time Since 2012 After Default – Bloomberg.
Argentina’s economy contracted more than forecast in the third quarter after the South American nation defaulted on its debt for the second time in 13 years, forcing the government to crimp imports amid a shortage of dollars.
Gross domestic product shrank 0.8 percent from the year-earlier period, the national statistics agency reported today. The median estimate of nine economists surveyed by Bloomberg was for a decline of 0.6 percent, after growth stalled in the previous three months.
South America’s second-largest economy contracted for the first time since the second quarter of 2012 on the heels of a default July 30 after a battle with creditors prompted a U.S. judge to block the distribution of its debt payments. Seeking to preserve international reserves that fell to an eight-year low in April, the government increased limits on imports, making it harder for manufacturing industry to obtain inputs.
Argentina posted a current account deficit of $736 million in the quarter compared with a shortfall of $1.7 billion in the same quarter a year earlier. The national statistics institute also reported today that economic activity rose 0.1 percent in October from the year earlier, while industrial production shrank 2.1 percent in November.