Argentina's economy grew 5% year-on-year in September, says INDEC

Argentina’s economy expanded more than expected in September despite heightened market turmoil brought on by local and national midterm elections.

Economic activity grew 0.5 percent from August and five percent compared to the same month of the previous year, the national statistics agency said Tuesday. Economists polled by Bloomberg estimated an annual expansion of 1.9 percent. The August monthly print was revised to 0.7 percent growth, up from 0.3 percent.

On September 7, voters in Buenos Aires Province, home to 40 percent of the population, delivered a heavy defeat to the party of President Javier Milei in a local election to renew the state legislature. The bad result for Milei’s pro-market government sent asset prices tumbling as investors prepared for the worst in a bigger national vote at the end of October. 

Milei then staged a major comeback in a landslide victory on October 26 that saw his party more than double its representation in Congress. Assets rallied as confidence in the government’s ambitious reform agenda surged and the probability of a swing back to the left diminished.

The peso weakened 2.6 percent in September, the most among emerging-markets currencies, boosting competitiveness in export sectors that have long complained that the exchange rate was overvalued. 

Economists forecast South America’s second-largest economy to grow 3.9 percent this year, with 30 percent inflation, according to a central bank survey.