Despite the fact that the economy of Argentina experienced growth that was more than what had been expected in the month of September, this occurred in the midst of a situation in which the volatility of the market had been exacerbated by municipal and national midterm elections. According to an announcement that was made on Tuesday, the national statistics agency has reported a gain of 0.5 percent in economic activity as compared to the month of August, and a rise of five percent as compared to the same month in the previous year. As per the results of survey anticipated a growth rate of 1.9 percent on a yearly basis. The monthly print from August was modified in order to show a growth rate of 0.7 percent, which is an increase from the 0.3 percent that had been published in the past.
In the course of a local election that was intended to bring about the renewal of the state legislature, voters in Buenos Aires Province, a region that is home to 40 percent of the country’s population, delivered a significant defeat to President Javier Milei’s party on September 7. As a result of the disheartening conclusion for Milei’s pro-market administration, asset values decreased as investors prepared for the possibility of unfavorable circumstances during the national election that was scheduled to take place at the end of October.
After this, Milei successfully led his party to a major comeback and a decisive victory on October 26th, which led to his party’s representation in Congress more than doubling. The probability of a reversal of direction toward leftist policies became less likely at the same time that optimism for the government’s audacious reform agenda increased, which led to a gain in assets. In the month of September, the peso dropped by 2.6%, which was the most substantial decrease out of all currencies circulating in developing markets.
This depreciation improves competitiveness in export sectors that have been arguing for a long time that the exchange rate was too high. According to the results of a study conducted by a central bank, predictions are that the second-largest economy in South America would grow by 3.9 percent this year, accompanied by an inflation rate of thirty percent.