Argentina economy shrinks in fourth quarter as outlook darkens
FILE PHOTO: A woman buys fruits and vegetables at a greengrocery store in Buenos Aires, Argentina, December 12, 2023. REUTERS/Tomas Cuesta/File Photo
By Walter Bianchi and Hernan Nessi
BUENOS AIRES (Reuters) -Argentina’s economy shrunk 1.4% in the fourth-quarter of 2023 versus a year earlier, the country’s statistics agency said on Wednesday, slightly beating analysts’ forecasts but darkening an already gloomy outlook for the embattled South American country.
The GDP reading marks the third quarterly year-on-year decline in a row and underscores the challenge facing new libertarian President Javier Milei, who has pushed a tough austerity package since taking office in December.
That has helped boost markets and the state’s financial position, though rapid data on production, consumption and economic activity suggest the real economy is reeling at the start of this year, signaling a likely recession.
The country – battling inflation over 275%, rigid capital controls and rising poverty – has not yet entered a technical recession of successive quarter-on-quarter economic contractions, but meets other broader definitions.
In the United States, the authoritative National Bureau of Economic Research (NBER) defines a recession more flexibly as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”
Argentina’s economy contracted 1.6% in the full-year 2023, INDEC data showed. In the fourth quarter, it was down 1.9% versus Q3, which which had expanded from Q2.
In the fourth quarter, agriculture, the country’s key industry, was a better performer along with mining and hospitality, while manufacturing, retail, utilities and finance sectors declined. Investment was also down.
