UPDATE 1-Argentina industrial output falls for 11th straight month

(Adds prior expectation from minister, details from report, background on Argentina’s economy)

BUENOS AIRES, Jan 31 (Reuters) - Argentina’s industrial production fell 2.3 percent in December from the same month a year earlier, national statistics agency Indec said on Tuesday, marking the eleventh straight month of shrinking output.

That was a sharper drop than the median expectation for a 0.8 percent year-on-year decline in a Reuters poll. Industrial output fell 4.6 percent overall in 2016 from 2015, Indec said. Production minister Francisco Cabrera had previously said he expected positive year-on-year industrial growth by year-end.

Still, December’s drop was the smallest year-on-year decline since February 2016, as a 21.4 percent increase in the grains and oilseed milling industry and a sharp 31.4 percent jump in the automobile industry somewhat compensated for continued poor performance in the textile and steel sectors.

Argentina’s center-right President Mauricio Macri has struggled to lift Latin America’s third-largest economy out of recession. Last week, data showing a month-on-month gain in economic activity suggested the country may be closer to exiting its long downturn.

Reporting by Luc Cohen; Editing by Chris Reese, Bernard Orr