Economic activity shrinks for fourth month

Argentina’s economic activity contracted for the fourth straight month in a fresh sign that one of South America’s largest countries is barreling toward recession amid fast inflation and heightened political uncertainty.

Economic activity fell 0.2 percent in June from a month earlier, according to government data published Wednesday. The economy shrank 4.4 percent from a year prior, more than the 3.7 percent contraction expected by analysts surveyed by Bloomberg. May’s monthly drop was also revised lower, to minus 0.6 percent from minus 0.1 percent.

Argentina’s economy is being slammed by annual inflation running over 100 percent, while agriculture output has been curbed by a devastating drought. Overall exports plunged by 35.8 percent in June from a year ago. Complicating matters further, political uncertainty is running high ahead of October’s presidential vote after outsider Javier Milei finished first in a recent primary.

Economists surveyed by Argentina’s Central Bank expect gross domestic product to shrink 2.8 percent this year, followed by another decline in 2024. The estimates were gathered before the surprising primary election result on August 13 that was followed by an 18 percent devaluation of the official currency.