June 19, 2019 / 7:49 PM / a month ago

UPDATE 1-Argentina economy starts 2019 in reverse with 5.8% drop

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BUENOS AIRES, June 19 (Reuters) - Argentina’s economy contracted 5.8% in the first quarter of 2019, the country’s statistics agency said on Wednesday, a reflection of the biting recession that has hammered domestic consumption and production.

The steep fall marks a slight improvement versus the previous quarter, which had been the weakest quarterly performance in a decade, but keeps the pressure on President Mauricio Macri as he battles to revive growth.

The stalled economy, which started to contract in the second quarter of last year, has badly hurt Argentine consumers and business owners, and dragged down Macri in the polls ahead of presidential elections towards the end of the year.

South America’s second largest economy shrank 2.5% last year and 6.2% in the final quarter of 2018, capping a tumultuous period where the country was rattled by a plunging peso currency and rampant inflation.

Analysts polled by Reuters had seen first quarter GDP falling an average of 5.9% and a median of 5.7%.

The country’s unemployment rate rose to 10.1% in the first quarter from 9.1% in the first three months of last year, the official INDEC statistics agency also said.

Reporting by Jorge Otaola; Writing by Adam Jourdan; Editing by Sandra Maler

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