Argentina posts lower-than-expected 0.6 percent year-on-year growth in April

A man crosses the street in Buenos Aires' financial district

BUENOS AIRES (Reuters) – Argentina’s economic activity expanded 0.6 percent in April compared with the same period the prior year, government statistics agency Indec said on Wednesday.

The rate was well below the median forecast in a Reuters poll for 2.0 percent growth.

Economic activity in April was flat compared with March, Indec said. Latin America’s No. 3 economy grew a cumulative 0.4 percent in the first four months of the year compared with the same period a year earlier, when Argentina was in the midst of a deep recession.

The government expects growth of around 3 percent this year, after a contraction of 2.2 percent in 2016. President Mauricio Macri has increased infrastructure spending and cut export taxes on the key farming sector to try to boost output, but a promised wave of foreign investment has been slow to arrive.

April’s figure marked a deceleration from March, when economic activity grew 1.3 percent year-on-year – revised upwards from the 0.8 percent rate published last month – and 1.5 percent compared with February, revised downwards from the 1.9 percent rate published last month.

The construction sector, linked in part to public works, grew 8.4 percent year-on-year in April and agricultural output grew 4.6 percent. Industrial activity fell 1.9 percent, however, while retail and wholesale commerce declined 2.2 percent as 24 percent 12-month inflation ate into consumers’ purchasing power.

Indec also said on Wednesday that Argentina posted a $6.871 billion current account deficit in the first quarter of 2017, larger than the current account deficits posted during each of the four quarters of 2016.

(Reporting by Buenos Aires newsroom; Writing by Luc Cohen; Editing by Paul Simao and Leslie Adler)