Argentina’s economy unexpectedly shrank amid austerity push

Argentina’s economy unexpectedly shrank in September, as President Javier Milei fights to restart an ailing economy amid an aggressive austerity push.

Economic activity fell 0.3 percent from August, compared with the median estimate for 0.9 percent growth of economists surveyed by Bloomberg. From a year ago, activity fell 3.3 percent, according to government data published Friday.

South America’s second-biggest economy is showing incipient signs of recovery, with wage growth outpacing inflation for the sixth consecutive month in September and consumer spending and manufacturing showing gains in recent months. Inflation has been slowing consistently and monthly poverty data Milei’s team tracks closely shows poverty is shrinking from a two-decade peak, too.

Economists surveyed by Argentina’s Central Bank estimate gross domestic product will contract 3.6 percent this year, reversed by 3.6 percent growth in 2025.