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Argentina's economy contracts 3.4% in Q2 YOY as recession worsens

Argentina'sGDP shrank 3.4% in the second quarter of 2016 from the same quarter a year ago,which is the highest year-over-year contraction in nearly two years as the country'srecession deepened.

Accordingto data from national statistics agency INDEC, the economy contracted 2.1% fromthe previous quarter, compared to a 0.5% contraction in the first quarter.

INDEC'sseasonally adjusted data shows that this is Argentina's third consecutive quarterlyeconomic contraction, which means the economy remains technically mired in a recession.

All sectorsof the economy showed a year-over-year decline in the second quarter, includingprivate consumption, exports and fixed capital investment, which fell 0.1%, 1.9%and 4.9%, respectively.

A slowdownin construction activity, which fell 10.2% in the second quarter from a year ago,is a key reason for the economy's continuing contraction, Bloomberg reported.

However,some economic indicators, such as cement sales and new building permits, suggesta recovery is underway in the third quarter, Cronista reported.

In addition,Argentina's Finance Minister, Alfonso Prat Gay, reportedly said it is "verylikely" that the economy will grow in the third quarter and beyond.