Argentina’s economy grew more than expected in January

Argentina’s economy grew more than expected in January, solidifying the country’s bounceback after two straight quarters of growth under President Javier Milei’s watch.

Economic activity rose 0.6 percent from December, more than the 0.2 percent median estimate of economists surveyed by Bloomberg. From a year ago, the gross domestic product proxy grew 6.5 percent, compared with the median estimate of five percent, according to government data published Thursday.

Retail sales led year-on-year growth, followed by financial activity and manufacturing, while fishing, hotels and restaurants fell compared with the same time period.

South America’s second-largest economy has been showing consistent signs of momentum after a deep slump 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.

Annual inflation has cooled to 66.9 percent from 211 percent when Milei first took office. Argentina is close to clinching a new deal with the International Monetary Fund that Economy Minister Luis Caputo said Thursday would total US$20 billion. The loan, which is still being formally negotiated, would help to beef up the Central Bank’s depleted coffers to allow Argentina to lift capital controls, the foremost impediment to the country’s sustained growth.

The IMF estimates Argentina will grow five percent in 2025.