Argentina economic system seen shrinking 2.6% in Q3, however recession may break

By Hernan Nessi

BUENOS AIRES (Reuters) – Argentina’s economic system is predicted to have contracted 2.6% within the third quarter of 2024 versus a yr earlier, the sixth straight such decline, however expanded towards the quarter earlier than, breaking a technical recession going again to the tip of final yr.

A Reuters ballot on Thursday, involving 13 native and international analysts, gave the year-on-year contraction of gross home product (GDP), which follows a 1.7% contraction within the second quarter and a steep 5.1% drop within the first quarter.

Financial exercise, an early barometer of progress, slid 3.3% year-on-year in September, 3.7% in August and 1% in July, information from the INDEC statistics company present, as trade slowed amid a harsh austerity drive by libertarian President Javier Milei.

Milei’s administration has slashed social spending and launched mass public sector layoffs, and one of many world’s highest annual inflation charges has come all the way down to 166%. However the economic system has slowed and poverty charges have surged previous 50%.

The federal government has gained plaudits for stabilizing the state’s funds after years of overspending, which has boosted markets. However getting the economic system going would be the acid take a look at for Milei’s reforms and his nonetheless strong reputation ranking.

Eugenio Mari, chief economist at Fundacion Libertad y Progreso, stated he anticipated the economic system to develop some 3% from the earlier quarter, which might break three consecutive quarter-on-quarter declines that marked a technical recession.

“Let’s hope this pattern consolidates in 2025,” Mari stated.

The federal government predicted in its draft funds that GDP ought to develop by 5% subsequent yr.

INDEC is ready to launch third-quarter GDP information on Monday.