August 24, 2016 / 8:22 PM / 2 years ago

UPDATE 1-Argentine economy shrank sharply in govt's first growth data

(Adds result for first half of 2016, forecast from cabinet chief for full year, context, details)

BUENOS AIRES, Aug 24 (Reuters) - Argentina’s economy shrank 4.3 percent year-on-year in June, a much sharper contraction than expected in the first official growth data reported during President Mauricio Macri’s term.

In the first half of 2016, economic activity fell 1.3 percent from the same period in 2015, national statistics agency Indec added on Wednesday, shortly after Macri’s cabinet chief Marcos Pena forecast a 1 percent contraction for all of 2016.

Indec had held off on reporting key economic indicators after Macri ordered a restructuring due to suspicions it manipulated data during the government of his predecesser Cristina Fernandez.

A Reuters poll had forecast a median drop of 1.1 percent in the June EMAE economic activity index, which is a close proxy for gross domestic product. Analysts surveyed said that a downturn in construction likely drove the contraction in June. Indec did not offer a breakdown of activity by sectors.

Economic activity shrank at a seasonally adjusted 0.3 percent pace in June from May, Indec said.

Macri said in an Aug. 10 interview that the economy will likely grow 3.5 percent in 2017, driven by fresh investments. A former businessman whose election victory in November ended 12 years of leftist policies, Macri said the economy will stabilize in the last quarter of 2016. (Reporting by Buenos Aires bureau; Editing by Sandra Maler and Jonathan Oatis)

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