(Adds comments from Argentina’s Finance Minister)
By Joanna Zuckerman Bernstein and Antonio De la Jara
BUENOS AIRES, June 29 (Reuters) - Argentina’s economy grew 0.5 percent in the first quarter, confounding expectations it would shrink, the government said on Wednesday, adding that it saw activity evening out this year before accelerating in 2017.
The year-on-year result, published by the newly revamped Indec statistics agency, followed analysts’ forecasts for a 1.3 percent contraction for the January through March period, according to a Reuters poll.
Latin America’s third largest economy was helped by 7.5 percent growth in its fishing sector and 4.2 percent expansion in transport. Construction and agriculture, crucial because the country is a grains-exporting powerhouse, both fell by more than 5 percent, Indec said.
The result follows efforts by President Mauricio Macri, who took office in December, to boost the economy through free-market measures.
Indec also revised its 2015 growth figure to 2.37 percent from the 2.1 percent expansion Macri’s government initially reported for last year.
“There’s a mix in the economy. There are sectors that are moving along at a good pace and other sectors that are dragging,” Argentine finance minister Alfonso Prat-Gay said on the sidelines of the Pacific Alliance trade bloc summit in Puerto Varas, Chile.
“We think that by the time we get to the end of the year all this is going to be evened out and certainly, next year will be a year of growth,” he added.
Macri’s government has eliminated currency controls and grains export taxes, lowered utility subsidies, and settled a long-standing lawsuit with bond-holders that had kept the country in default.
“We believed that during this reasonable time of six months (H1 2016) some of the things that are going to boost growth in the second half of the year would start to get resolved,” Prat-Gay said.
Goldman Sachs said in a note to clients that though first quarter growth surprised to the upside it still saw a full-year contraction of 0.2 percent.
Last week Prat-Gay warned the economy needed investment and was at risk of contracting due to a recession in Brazil.
Macri’s team has overhauled Indec to come up with accurate figures and reestablish confidence in its data.
The statistics agency was long accused of reporting inaccurate data under former President Cristina Fernandez.
Andres Borenstein, BTG Pactual’s chief economist for Argentina, said he did not question the credibility of the figures released Wednesday.
“I don’t have any reason to suspect any problem with this set of data,” he said. (Reporting by Joanna Zuckerman Bernstein; Additional reporting by Walter Bianchi and Antonio de la Jara and Anthony Esposito in Puerto Varas, Chile; Editing by Diane Craft and Andrew Hay)