According to Indec (the National Statistics Institute) real GDP contracted 0.7% q/q (sa) in Q1 2016. In y/y terms, though, outputstood slightly (0.5%) above the previous year’s levels. Performance was thus stronger than consensus expectations and theBNP Paribas forecast, that stood at -1% and -1.5% y/y, respectively.

GDP growth had been on a steady downtrend during the last year (Chart 1). We think this downtrend likely intensified in Q22016 but we expect a stabilisation in H2 2016. For 2017, we forecast a healthy 4% rebound. We will take a closer look at therevised series to fine-tune our forecasts.

The modest y/y advance in Q1 according to preliminary figures was driven by a 13% y/y jump in real exports and 2.7% and1.1% advances in public and private consumption, respectively. Investment, in contrast, contracted 3.8% y/y in Q1.

Importantly, Indec also unveiled revised series for the period 2004-2015 given that the quality of GDP data during those yearshad been severely questioned. As expected, real GDP levels during the period were revised sharply lower (Chart 2). Real GDPgrowth in that period stands at 48% according to the new figures, 18pp below the figure according to the old series. In contrast,nominal GDP levels of recent years were revised up.