Argentina’s Economy Contracts Yet Shows Signs of Recovery in Late 2024

Argentina’s economy contracted 1.7% in 2024, though late-year growth emerged with a 1.4% quarterly expansion in Q4. The annual rise reached 2.1%, surpassing predictions. Challenges remain due to austerity measures and high inflation, currently at 66.9%.

In 2024, Argentina’s economy experienced a contraction of 1.7% compared to the previous year, according to the nation’s statistics agency. However, there was a notable rebound observed in the final quarter, where the economy expanded by 1.4% quarter-on-quarter, indicating two consecutive periods of growth. Additionally, in the October to December timeframe, the year-on-year GDP saw an increase of 2.1%, surpassing analysts’ projections of a 1.7% growth.

Despite the positive signs in the latter part of the year, the Argentine economy initially struggled in early 2024 due to a significant slowdown in industrial activity, exacerbated by stringent austerity measures implemented by President Javier Milei. Nevertheless, improvements were noted towards the end of the year as the economy began to rebound.

The inflation rate in Argentina has eased to 66.9%, as the government continues to address economic challenges through the removal of capital controls. However, citizens are still facing difficulties, grappling with escalating costs and reductions in public services.

In summary, Argentina’s economy faced a contraction in 2024, shrinking by 1.7% year-on-year, despite a resurgence in the latter months. The fourth quarter displayed positive growth, with a 1.4% quarter-on-quarter increase and a 2.1% rise year-on-year. The government’s austerity measures have created challenges, yet recent steps to manage inflation signal a potential path toward economic recovery, although challenges remain for the populace regarding cost of living and public services.

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