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Argentina economy suffers worst shrinkage of Macri era

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Argentina's economy suffered its worst shrinkage during the tenure of President Mauricio Macri in November, the state statistics bureau said on Thursday.

[BUENOS AIRES] Argentina's economy suffered its worst shrinkage during the tenure of President Mauricio Macri in November, the state statistics bureau said on Thursday.

Gross domestic product dropped 7.5 per cent compared to the same period in 2017.

It was the fourth month in a row that the economy dwindled following falls of 4.2 per cent in October and 6.1 per cent in September.

For the period January to November 2018, the economy shrank 2.2 per cent compared to 2017.

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The worst hit sectors were commerce, industrial manufacturing and construction.

Argentina entered recession in December after the statistics bureau revealed the economy had diminished during the third quarter of 2018, the second quarter in a row it had done so.

Economy Minister Nicolas Dujovne said on Wednesday at the World Economic Forum in Davos that he expects GDP to fall by around 2.0 per cent in 2018.

The International Monetary Fund predicts that figure will be 2.6 per cent, with the economy shrinking another 1.7 per cent this year.

Argentina was gripped by an economic crisis last year that forced Macri to agree a US$56 billion bailout loan with the IMF.

It was sparked by a fall in confidence in the currency, with the peso losing more than half its value against the dollar last year, while inflation finished 2018 at 47.6 per cent.

Mr Macri's approval rating crashed from 66 per cent in October 2017 to just 35 per cent last month, according to a poll by the San Andres University, and he faces an uphill battle for re-election in October.

AFP