Argentina's economic activity falls 2.9% in July

Economic activity in Argentina dropped 2.9% in July, according to data published by the national statistics agency Indec. This represents the sharpest monthly contraction since April 2020 and has led private economists to warn that the country could enter a technical recession in the third quarter.

Following a 0.6% contraction in the second quarter compared to the previous quarter, analysts estimated that the economy would need to expand roughly 6% cumulatively between August and September to avoid a second consecutive quarterly drop. If confirmed, this would mark the ninth recession for the Argentine economy in the last 32 years.

Federico Filippini, chief economist at Adcap, noted that the economy points toward a technical recession despite strong harvest results and output growth in Vaca Muerta, calculating that consecutive monthly expansions of 3% would be required to avoid it. Economists from Empiria, Analytica, Equilibra, and Fundación Libertad y Progreso also indicated that avoiding a negative third quarter remains unlikely given the magnitude of July's decline.

President Javier Milei downplayed stagnation concerns on Thursday, September 24, during an interview in New York with Bloomberg News editor-in-chief John Micklethwait. Milei stated that the government expects the economy to grow around 3% or slightly less this year, with a similar rate projected for next year.