Argentina is sliding towards a technical recession on private estimates cited again on Friday, after official output fell 0.6 per cent in the second quarter and consultancies put the third quarter between 1.2 per cent and about 2.7 per cent lower. A technical recession is two consecutive quarters of falling seasonally adjusted GDP.
INDEC, Argentina’s statistics office, said seasonally adjusted output in the second quarter was 0.6 per cent lower than in the first, though still 2.0 per cent higher than a year earlier. Private consumption fell 2.4 per cent, public consumption 2.3 per cent, and fixed investment 0.8 per cent, while exports rose 2.5 per cent.
The official monthly activity estimator already points the same way. The August bulletin showed activity down 1.7 per cent on a year earlier, the steepest annual fall of 2026 in that series, after a 2.8 per cent month-on-month drop in July. On those official index levels, July and August together ran 2.8 per cent below the second-quarter average. Had September held at August’s level, the third-quarter average would also have been about 2.8 per cent lower. Merely to keep the third quarter level with the second, September would have needed an 8.6 per cent leap.
Luis Caputo blamed “transitory shocks” in July — less gas for industry, unusually heavy rain and snow, and fewer hours worked during the football World Cup — and stressed a 1.7 per cent rise in the first seven months of the year.
In October 2025 Milei’s La Libertad Avanza won a midterm victory, with about 40.7 per cent of the national vote, after a pre-election currency scare and a $20 billion US Treasury currency-swap agreement. The National Pulse has previously reported that backing.
Annual inflation, which had been 289.4 per cent in April 2024, was 33.1 per cent in the year to October, according to the official consumer prices bulletin, with prices up 2.2 per cent on the month. The International Monetary Fund has cut its 2026 growth forecast for Argentina to 2.1 per cent, from 3.5 per cent. Official quarterly output has already fallen once, and the official monthly series through August makes a second fall very hard to avoid.
Argentina has, in recent months, begun sabre-rattling over the British-owned Falkland Islands again. The Falklands have never been Argentinian, and only experienced a very short occupation by Argentina’s predecessor nation in the 1800s. Falkland Islanders recently voted to remain British in a referendum, and Britain humiliated Argentina when the country attempted to invade in the 1980s.
