Bloomberg — Argentina’s economy unexpectedly grew in May, expanding for the second straight month despite elevated inflation.
Economic activity rose 0.3% from April, compared with the median estimate of economists surveyed by Bloomberg for a 0.5% decline. From a year ago, the economy grew 7.4%, according to government data published Wednesday. Tourism, mining and construction led activity during May.
Despite May’s gains, Argentina’s economic outlook continues to deteriorate as inflation heats up, the gap between exchange rates widens and activity is expected to slow. Many consulting firms in Buenos Aires project 90% annual inflation by December, while the country’s black market peso, known as the “dolar blue,” weakened to a record 312 pesos per dollar Wednesday.
South America’s second-largest nation is expected to enter a brief recession this year with contractions in the second and third quarters of the year, according to a central bank survey. Overall though, Argentina is still expected to grow 3.2% this year.