The prospects for economic recovery for the fourth quarter and 2025
The past week has been particularly rich in macroeconomic information. The National Statistical Bureau (INDEC) published the main quarterly indicators (GDP, unemployment and the balance of payments) for the second quarter of 2024, together with the poverty indices for the first semester (1H24). In addition to these low frequency data, the usual end-of-month indicators were published, such as the EMAE (monthly GDP proxy) and retail sales for the month of July. Finally, two privately measured leading indicators for August for industrial production (the Fiel and the OJF-Orlando J Ferreres indices) were also announced.
Taking advantage of these publications, we present in this report a brief review of Argentina’s economic situation eight months into the new administration. We start by focusing on activity, as this is one of the variables that naturally suffers from an macroeconomic re-balancing and sets the background for the social support or voters’ patience with the current economic program. We end with a review of the external accounts.
Our conclusion is that while Q2 GDP data does not yet affirm the idea of an economic recovery, and preliminary data for Q3 are mixed at best, we still believe that the economic outlook is positive enough to expect a more convincing path of economic recovery from 4Q24 or 2025 onward—or least to reflect a positive annual growth rate. One of the main challenges for this government is the speed and depth of such a recovery. However, as usual, there are already some signs of fatigue in social support for the administration, and the hardline opposition will try to take advantage of this.
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