BUENOS AIRES (Reuters) - Argentina's economy shrank 0.9 percent in April from the same month the year before, government data showed on Tuesday, citing a drought that shriveled the country's soy crop.
The key agriculture sector plummeted 31 percent from April 2017, according to government statistics agency Indec, resulting in the first negative monthly reading for the economy of the South American grains powerhouse since February of last year. The economy shrank 2.7 percent compared with March.
Farming is the backbone of Argentina's economy. It is world's top exporter of soy meal and soy oil and one of the top shippers of corn and raw soybeans. The country's worst drought in decades, which ran between late 2017 and April this year, reduced both crops' harvests by tens of millions of tonnes.
Treasury Minister Nicolas Dujovne has said the drought will reduce 2018 growth by 1.5 percentage points of gross domestic product (GDP) and reduce the country's exports by hundreds of millions of dollars.
After expanding nearly 3 percent in 2017, economists have cut their expectations for growth in Argentina this year as a result of the drought and a run on the peso currency