Argentina's Economy Faces Steepest Decline Since 2020 Amid Austerity Measures

Argentina's economic activity dropped 8.4% in March compared to the previous year, marking the fifth consecutive month of decline and the most significant downturn since 2020. The steep fall underscores the impact of President Milei's austerity policies aimed at combating poverty and inflation nearing 300% annually.

Argentina's economic activity fell 8.4% in March from a year earlier, the country's official statistics agency said on Wednesday, its fifth monthly drop in a row and the steepest fall since 2020.

The result was a steeper drop than the 6.9% fall estimated by market analysts in a Reuters poll, underscoring the impact of libertarian President Javier Milei's cost-cutting policies since taking office in December. Milei has embarked on a painful austerity drive in an effort to bring down rising poverty and annual inflation near 300%.

Nine sectors recorded declines in the year-on-year comparison, led by construction that posted a 29.9% decline and the manufacturing industry which slipped 19.6%, according to the data published by Argentina's INDEC statistics agency. Economic activity numbers are seen as a useful early indicator of likely gross domestic product results.

The fall in activity in March follows year-on-year declines of 3.0% in February and 4.1% in January. In the year through March, Argentina's economic activity fell 5.3%.