Argentina’s economy grew less than expected in March

Argentina’s economy grew less than expected in March as the country braced for a new programme with the International Monetary Fund.

Economic activity rose 5.6 percent from the same month a year ago, compared with the median estimate of 6.5 percent, according to government data published Wednesday. On the month, activity fell 1.8 percent after a 0.8 percent rise in February.

In March, market volatility spiked Argentina’s monthly inflation to 3.7 percent on the expectation that a new IMF programme would bring along a 10 percent peso devaluation. But that never happened and instead, as the government insisted, the peso has strengthened within the bands. Monthly inflation cooled to 2.8 percent in April.

South America’s second-largest economy has been showing consistent signs of momentum after two quarters of contraction exacerbated by Milei’s austerity policies in the first half of 2024. Between October and December, exports, government and consumer spending and capital expenditures led more-than-expected quarter-on-quarter growth.

The IMF granted Argentina a US$20-billion financing package on April 11, with US$12 billion upfront that allowed them to lift crucial capital restrictions and relax currency controls, the foremost impediments to the country’s sustained growth.

Economists surveyed by the Central Bank in April estimate Argentina will grow 5.1 percent in 2025.