“Argentina officially emerged from a deep recession in the third quarter of 2024, marking an important milestone in libertarian President Javier Millay’s efforts to overcome a prolonged economic crisis.”, — write: epravda.com.ua
Argentina officially emerged from a deep recession in the third quarter of 2024, marking an important milestone in libertarian President Javier Millay’s efforts to overcome a prolonged economic crisis. The Financial Times writes about it. According to the National Statistics Agency, the country’s gross domestic product (GDP) grew by 3.9% from July to September compared to the previous quarter. This is the first quarter of growth since Argentina entered recession at the end of 2023. At the same time, compared to the same period in 2023, GDP decreased by 2.1%. President Javier Millais, who has been in office for a year, has implemented tough reforms, including massive cuts in public spending and deregulation. These measures have brought down triple-digit inflation, but at the same time caused a significant increase in poverty, reaching 53% in the first half of 2024. Advertisement: The reforms have made Miley popular with global right-wing leaders, including Donald Trump and Elon Musk, and boosted investor confidence. On Monday, Argentina’s sovereign bonds rose in price, while the risk premium over US bonds fell to 677 basis points, compared to more than 2,000 when Miley came to power. Although JPMorgan forecasts Argentina’s economy to contract by 3% this year, it is expected to grow by 5.2% in 2025. This will allow to return the level of GDP per capita to the indicators of 2021. Economic growth in the third quarter was driven by a recovery in consumer spending, capital investment, and strong exports in agriculture and mining. However, the manufacturing and construction sectors remain in dire straits.Advertisement: Analysts warn that to maintain his popularity ahead of the 2025 midterm elections, Miley must deliver sustained growth that will raise the standard of living for Argentines. Among the key challenges of his government are the removal of currency restrictions and the stimulation of foreign investment, which is held back by a lack of reserves in the central bank. Argentina’s economy is expected to grow in 2025, albeit at a slower pace than in 2024. Argentina has been the IMF’s largest debtor for many years. In 2018, the country was allocated the maximum credit line in the history of the IMF for 57 billion dollars. However, it soon found itself in a difficult position again and turned to the IMF in 2022 for another loan of $44 billion. Today, Argentina’s liabilities amount to 40.94 billion dollars. We will remind: Monthly inflation in Argentina slowed to 2.4% in November, which is the lowest rate in the last four years, as local residents began to cautiously hope that the worst period of the economic crisis may be over.