Argentina’s economy emerged from a deep recession in the third quarter of 2024 in a milestone for President Javier Milley as he seeks to end the country’s long-running crisis.
Gross domestic product grew 3.9% in the July-September period in seasonally adjusted terms from the previous quarter, marking Argentina’s first quarter of growth since it entered recession in late 2023, the country’s statistics agency said on Monday.
Compared with the same period in 2023, third-quarter GDP shrank 2.1%.
The recovery comes as Milley completes a year in office, during which he has announced sweeping spending cuts and a tough deregulation push. The program has reduced the country’s triple-digit annual inflation and made the self-proclaimed “anarcho-capitalist leader” one of the most prominent leaders of the global right, earning glowing comments from the likes of US President-elect Donald Trump and billionaire Elon Musk.
Argentina: What has Javier Milley achieved so far?
Argentina’s government bonds rose on Monday, with the premium over US bonds that investors demand to maintain its debt falling 4.4% to 677 basis points, from more than 2,000 when Milley took office.
The economic crisis, caused in large part by the reckless money printing of previous governments, fueling inflation. The country’s poverty rate rose 11 percentage points in the first half of 2024 to 53%.
Argentina to bounce back in 2025
Trust Economics estimates that Argentina’s economy will end 2024 with an annual contraction of 3% but will grow 5.2% next year.
The turnaround comes from a recovery in consumer spending and capital investment from a sharp decline earlier this year and continued strong growth in agricultural and mining exports. Manufacturing and construction remain in deep recession.
Milley must deliver sustained economic growth to begin raising Argentines’ living standards if he is to prevail in midterm elections in late 2025.
There are still major challenges for his government, including lifting Argentina’s capital and currency controls, which deter foreign investment and prevent the central bank from building up hard currency reserves.
The economy will continue to grow in 2025 “albeit at a slower pace” than the initial recovery.
