BUENOS AIRES, Aug 20 (Reuters) - Argentina’s economic activity index held steady in June compared with the same month a year ago, official data showed on Wednesday, bucking expectations for a decline in Latin America’s third largest economy.
The median forecast in a Reuters poll of economists had been for a fall of 0.7 percent in the monthly EMAE economic activity index, which is a close proxy for gross domestic product. Output fell 0.2 percent on the year in May.
Shrinking industrial output and weakness in consumption sent the Argentine economy into recession in the first quarter of this year. Argentina was already grappling with one of world’s highest inflation rates and falling foreign reserves.
Economists expect the country’s default last month will likely prompt the recession to worsen throughout the second half of the year as pressure on the local currency increases, investment falls and import restrictions tighten.
Nonetheless, activity rose 0.3 percent on the month in June, the data from the INDEC statistics agency showed. (Reporting by Alejandro Lifschitz; Writing by Sarah Marsh; Editing by Diane Craft)