Argentina's Economy Faces Fifth Quarterly Decline Amid Austerity

Argentina's economy likely contracted by 1.4% in the second quarter, marking the fifth consecutive decline. President Javier Milei's austerity measures have deepened the recession, increasing poverty and unemployment. Despite some recovery in sectors like agriculture and energy, construction and consumption remain weak.

Argentina's economy is anticipated to have contracted by 1.4% in the second quarter compared to a year earlier, according to a Reuters poll conducted on Monday. This marks the fifth consecutive decline, exacerbating a recession deepened by libertarian President Javier Milei's stringent austerity measures.

Fifteen analysts' median GDP estimate for the April-June period follows a 5.1% year-over-year contraction in the first quarter. Official data will be released on Wednesday. Milei's cost-cutting policies have decimated economic activity, while pushing up poverty and unemployment rates. The administration argues these measures are essential to curb triple-digit inflation, replenish reserves, and reverse years of significant fiscal deficits.

Argentina entered a technical recession—two consecutive quarters of GDP decline—in the first quarter. While some analysts note signs the economic downturn might be bottoming out, substantial new capital will be needed to stimulate growth. Key sectors like agriculture and energy are recovering robustly, while construction and consumption lag behind.

(With inputs from agencies.)