Argentina's economy rebounded in Q3 but activity remains below 2023 levels

Argentina’s economy improved by close to four percent in the third quarter of 2024, closing out the recession and overshooting the expectations of analysts.

Nevertheless, activity remains below 2023 levels, with gross domestic product (GDP) in the third quarter 2.1 percent down on the previous year. That was, however, an improvement on quarterly declines of minus 5.2 percent (first quarter) and minus 3.4 percent (second quarter).

Data published Monday by the INDEC national statistics bureau showed the quarterly growth returning after three straight periods of decline. Between July and September, GDP showed a positive variation of 1.6 percent. 

It marks the first time GDP has risen over a three-month period since President Javier Milei took office last December.

The figures come amid a deep economic crisis in Argentina, which has been in recession for most of the year. Citizens are suffering from one of the highest inflation rates in the world, reaching 166 percent year-on-year in November. 

Official INDEC data from September indicates that 52.9 percent of the population is living in poverty, with 18.1 percent in extreme poverty.

Since taking office, Milei has implemented austerity measures, halted public works projects, downsized and abolished state agencies, stopped provincial funding, dismissed thousands of public sector workers, deregulated prices and eliminated subsidies.

In November, Milei told business leaders that the recession in Argentina had ended. “We are emerging from the desert; the country has finally started to grow,” he declared in a speech.

In seasonally adjusted terms, exports grew by 3.2 percent in Q3 2024 compared to Q2, private consumption increased by 4.6 percent, public consumption by 0.7 percent, and gross fixed capital formation rose 12 percent.

Year-on-year, the sharpest decline was in gross fixed capital formation (minus 16.8 percent). Among sectors, the largest drops were seen in construction (minus 14.9 percent), fishing (minus 6.7 percent), and wholesale, retail trade and repairs (minus 6.1 percent).

Annual growth was recorded in agriculture, livestock, hunting and forestry (13.2 percent), hotels and restaurants (nine percent), and mining and quarrying (6.6 percent).

– TIMES/AFP