Argentina's Economy Shows Signs of Life in Q3
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Argentina's economy expanded for the first time in four quarters during the July to September period, signaling a potential turnaround after a prolonged period of contraction, reports Reuters. However, the economy still contracted on a yearly basis.
Gross domestic product (GDP) grew by 3.9% in the third quarter compared to the second quarter, according to official data released on Monday. This marks the first quarter-on-quarter expansion since late 2023, when Argentina entered a technical recession.
Despite this positive development, the economy contracted by 2.1% year-on-year in the third quarter, marking the sixth consecutive quarter of contraction. However, this decline was less severe than analysts' forecasts of a 2.6% drop.
Argentina's economic struggles have been exacerbated by austerity measures implemented by libertarian President Javier Milei, who took office in December 2022. Milei's administration has significantly reduced social spending and implemented widespread public sector layoffs. This strategy, coupled with one of the world's highest inflation rates (currently at 166%), has slowed economic activity and led to a sharp increase in poverty rates, exceeding 50%.
Despite the challenges, the third quarter's quarter-on-quarter growth signals a potential shift in Argentina's economic trajectory. However, the ongoing yearly contraction and the significant social and economic challenges facing the country highlight the complex path to recovery.