By Hernan Nessi

BUENOS AIRES, (Reuters) – Argentina’s third quarter GDP grew 11.9% year-on-year in 2021. This is in line with the expectations for a strong rebound after the 10.2% contraction last year.

After taking an enormous hit in the COVID-19 pandemic that decimated its crops, the South American nation of grains has seen its economy rebound faster than expected. The government increased its 2021 annual growth projections to 10%.

17 expert analysts, both from the United States and abroad, predicted a median 12% increase in July-September quarter growth according to Reuters.

“In the third quarter, a recovery in consumption stood out,” said Isaías Marini, an economist at consultancy Econviews, who had forecast a 12% rise and expected the recovery to last into the final quarter of the year as salaries picked up.

According to “The Salary Improvements, the Recent Relaxation (of Restrictions) and Reactivation of Credit the Year will End Even Above 10%” However, short-term risks include the shortage of funds to finance growth and consequent instability in exchange rates.

The extractive activities of oil and fuel production are the largest drivers of today’s economic growth. The agricultural sector is also showing a good performance and outlook,” said Pablo Besmedrisnik, economist at consulting firm Invenómica.

The two sectors play a key role in obtaining Argentina’s foreign exchange needs over the short- and long-term.

In the second quarter 2021, South America saw a 17.9% increase in its GDP.