Argentina posts first quarterly contraction since 2024

BUENOS AIRES

Argentina’s economy shrank 0.6 percent in the second quarter from the previous three months, recording its first quarterly contraction since 2024 as spending and investment declined.

The decline was smaller than the 0.9 percent forecast by economists surveyed by Bloomberg. Gross domestic product grew 2 percent from a year earlier, according to official figures released on Sept. 17.

Household spending, government consumption and investment all fell from the first quarter. Higher exports and lower imports helped cushion the decline.

Unemployment rose to 7.9 percent in the second quarter. An August survey by AtlasIntel identified joblessness as Argentines’ leading economic concern.

President Javier Milei’s government has pursued tight fiscal policies to curb inflation and eliminate chronic budget deficits while opening the economy to more international trade. It has also allowed the peso to strengthen in inflation-adjusted terms.

Bloomberg Economics said the weak second-quarter figures offered limited guidance on the outlook. 

Its analysts expect positive but modest growth in coming quarters, with strong performance in primary industries and limited signs of expansion across the wider economy.