BUENOS AIRES (Reuters) -Argentina’s economic activity likely grew 6.4% year-on-year in June according to median forecasts of analysts polled by Reuters, who, however, warned that restrictive monetary policy and risks over the upcoming legislative elections could slow growth.
The poll of 14 local and international analysts showed an mean average forecast for 6.6% growth in Latin America’s third-largest economy, ranging between estimates of 3.2% and 9.9%.
“However, if we zoom out, we find that economic activity has remained virtually unchanged since February,” said Eugenio Mari, chief economist at the Fundacion Libertad y Progreso (LyP) think tank.
Pablo Besmedrisnik, an economist and director at consultancy VDC, pointed to high interest rates slowing growth and limiting improvements for residents’ income.
“The pressure on the dollar is pushing monetary authorities to adopt a very restrictive policy, raising interest rates to very high levels,” he said.
“This reality will necessarily have a recessionary impact, which adds to the low dynamism of the population’s income.”
Consulting firm Orlando Ferreres y Asociados said it saw more risk of a slowdown in activity, citing a stagnation in the recovery of household incomes and monetary policy that prioritizes fighting inflation over economic growth.
This leads to “higher and more volatile interest rates,” it said.
Argentina’s monthly economic activity data, known as EMAE, is a closely watched indicator that helps anticipate the country’s gross domestic product (GDP).
Statistics agency INDEC will publish the June data on Wednesday afternoon (1900 GMT).
(Reporting by Hernan Nessi; Writing by Paolo Laudani; Editing by Marguerita Choy)
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