Argentina’s economy has shown significant progress, with year-on-year growth for the second consecutive quarter, marking the fastest expansion since 2022. The recovery follows a recession last year, although challenges remain. Official data released on Monday revealed that the Gross Domestic Product (GDP) grew by 5.8% in the first quarter compared to the same period in 2024. This growth was driven by President Javier Milei’s economic policies, including the peso devaluation in December 2023 and subsequent austerity measures.
Private consumption saw a notable increase of 11.6% from the previous year, indicating consumer-level recovery. President Milei praised the figures as “a fantastic result” on social media platform X, despite criticism over a decline in public sector consumption. Analysts had anticipated a slightly higher growth rate of 6.1%, according to a Reuters poll. Nonetheless, this remains the most substantial expansion since the third quarter of 2022, when the economy was recovering from the impacts of the COVID-19 pandemic.
In seasonally adjusted terms, GDP grew by 0.8% compared to the fourth quarter of 2024, reflecting a slowdown from the previous two quarters. Exports from the agricultural sector rose by 7.2%, setting a record for the first quarter, as noted by Economy Minister Luis Caputo. However, imports surged by 42.8%, mitigating the positive impact of export growth.
Argentina’s economy exited a severe recession in the latter half of last year, and economists are closely monitoring whether this recovery will solidify in 2025. While Milei’s efforts to stabilize the country’s finances have been acknowledged, his stringent austerity measures have affected economic activity, particularly impacting public workers whose salaries have not kept pace with inflation. According to the central bank’s latest market expectations survey, GDP is projected to grow by 5.2% this year.
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Argentina GDP growth fastest since 2022, though lagging forecasts
BUENOS AIRES, June 23 (Reuters) – Argentina ‘s economy grew year-on-year for the second consecutive quarter and by the most since 2022 as the economy recovers from last year ‘s recession while still facing some headwinds, official data showed on Monday.
Gross domestic product expanded 5.8% in the first quarter compared to the same quarter in 2024, when the economy was rattled by President Javier Milei ‘s December 2023 peso currency devaluation and subsequent austerity drive.
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Monday ‘s data showed signs of recovery at the consumer level, with private consumption growing 11.6% from a year ago.
Milei in a post on X called the data “a fantastic result,” while criticizing reports focusing on a dip in public sector consumption.
Analysts polled by Reuters had forecast GDP growing at a higher 6.1%, according to the poll ‘s median estimate. But the rate is still the largest expansion since the third quarter of 2022, when the economy was rebounding from COVID-19 pandemic-related losses.
Compared to the fourth quarter of 2024, GDP expanded 0.8% in seasonally adjusted terms, a slowdown from the two prior quarters.
Exports in the agricultural powerhouse grew 7.2%, which Economy Minister Luis Caputo said in a post on X was a first-quarter record. Still, imports surged 42.8%, dulling the exports boost ‘s impact.
Argentina ‘s economy emerged from a painful recession in the second half of last year, and economists have waited to see whether the recovery would consolidate in 2025.
While Milei has won plaudits for stabilizing the state ‘s finances, his tough austerity drive weighed on economic activity in the first months of 2024. Cuts to state spending continue to hit public workers hard, with salaries falling behind inflation.
The central bank ‘s latest market expectations survey of analysts forecasts GDP growing 5.2% this year.
Reporting by Hernan Nessi and Brendan O ‘Boyle; Editing by Kylie Madry and Bill Berkrot