September 19, 2019 / 7:55 PM / a month ago

UPDATE 1-Argentina economy edges out of recession, tougher road ahead

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BUENOS AIRES, Sept 19 (Reuters) - Argentina’s hard-hit economy edged out of recession in the second quarter of the year, expanding by a slight 0.6% on the back of a strong showing in the farming sector even as the South American nation braces for a weakening economic outlook ahead.

The expansion, revealed by Argentina’s statistics agency on Thursday, marked the first quarterly growth in gross domestic product (GDP) since the start of 2018, with the country rattled by currency crises and recession.

The modest economic growth in the April-to-June period also comes as the country prepares for a Oct. 27 election, following a landslide defeat for President Mauricio Macri in the August primary vote, which hammered local markets lower.

The primary result led to a resurgence of inflation, a sharp crash in the peso currency and concerns that the country could default on its debts, all of which have darkened the outlook for Latin America’s No. 3 economy.

The country’s economy shrank 2.5% last year and 5.8% in the first quarter of 2019. The government expects a 2.6% contraction this year.

Argentina’s unemployment rate also rose to 10.6% in the second quarter from 9.6% in the same period last year, the official INDEC statistics agency said on Thursday.

Reporting by Hugh Bronstein; Writing by Adam Jourdan; Editing by Will Dunham

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