Argentina Enters Technical Recession as Analysts Cut Growth Forecasts

Private consultancies estimated a contraction in the July–September quarter, extending a decline already recorded in the second quarter. Official confirmation has not arrived: Argentina’s statistics agency, INDEC, has not published third-quarter GDP, and its September monthly activity reading is scheduled for Nov. 24, 2026.

Private Estimates Show a Contraction

The General Activity Index compiled by Orlando Ferreres y Asociados showed a 1.2% drop in the third quarter from the second, according to reports published in late October and cited by La Reforma.

The Center for Quantitative Studies in Business at the University of San Andrés estimated a decline of as much as 2.66% over the same period.

Equilibra estimated a 2.6% quarterly fall and said that would meet the usual definition of a technical recession, two straight quarters of contraction.

INDEC’s monthly activity estimator fell 2.8% in July and rose just 0.1% in August. La Reforma reported that September would have needed growth of about 8.5% to prevent a quarterly decline, a pace analysts called unfeasible.

Analysts Slash 2026 Growth Forecasts

Faced with weaker consumption and falling activity in sectors tied to the domestic market, consultancies have cut their 2026 growth forecasts to about 1% or less.

Eco Go now expects 0.8%, while Equilibra, FIEL and Empiria have adjusted their estimates to around 1%. LCG described 1% as a ceiling, far below the government’s 3% projection in the budget.

The second quarter had already contracted 0.6% from the previous quarter, according to figures cited by Perfil and other outlets.

The slowdown comes after President Javier Milei’s party won a midterm upset last year, a result he presented as a mandate to press ahead with reforms.

IMF Trims Its Outlook

In the second week of October, the International Monetary Fund lowered its 2026 growth forecast for Argentina to 2.1% from 3.5% in its World Economic Outlook.

The Fund had held the 3.5% figure in April and July. The new projection is still above the private consensus, but it is below the government’s 3% target.

La Reforma also reported that about 13,000 formal private-sector jobs were lost in July and that Argentina’s country risk had risen above 700 basis points.

U.S. support has been a backdrop to Milei’s program since last year, when President Donald Trump said Argentina was “fighting for its life” and Washington extended financial backing.

Milei recently said the world faced “more inflation, higher interest rates and less economic activity,” and that Argentina was “not immune,” adding that the country’s indicators “would not be evolving as positively as we expected at first,” Perfil reported.