Argentina Recession Worsens As Economy Shrinks More Than Expected

Argentina’s economy has shrunk 1.7% in the second quarter of the year compared to the previous three-month period. This is according to the country’s statistics on Wednesday, 18th of September, 2024.

Argentina’s gross domestic product also dipped 1.7% year-on-year, landing below analyst forecasts of a 1.4% contraction against the year-ago period.

According to Reuters, this marks the South American economy’s fifth straight annualized quarterly contraction and third quarter-on-quarter decline.

Argentina’s key farming sector led growth, shooting up 81.2% year-on-year, while fishing was up 41.3%. However, construction tumbled 22.2%, manufacturing fell 17.4% and retail activity slid 15.7%, statistics agency INDEC said.

Consumption and private investment also continued to slump, INDEC noted, though Argentina reduced its imports and grew its exports. Financial services, real estate and hotels and restaurants also saw activity shrink.

Argentina entered a technical recession – two straight periods of quarter-on-quarter GDP contraction – in the first quarter of this year. It ended 2023 with a 1.6% contraction.

The government of libertarian President Javier Milei, who took office in December, has pushed a tough austerity drive that has battered economic activity and pushed up poverty and unemployment.