Although September’s economic activity figures have yet to be released, August’s data indicate that Argentina is poised to enter a technical recession in the third quarter of the year. The latest figures indicate subdued economic activity, as assessed by the Monthly Economic Activity Estimator, a preliminary gauge of quarterly GDP released by the national statistics agency INDEC. In July, the EMAE experienced a significant decline of nearly 3% month-on-month, representing the most pronounced decrease since the pandemic and the first occurrence of such a magnitude in at least two decades that was not instigated by a peso devaluation or an international crisis. In August, there was a widespread expectation among economists that economic activity would experience a rebound. Although the recovery was not anticipated to completely counterbalance the losses from the previous month, it was projected to compensate for a significant portion of the decline.
The EMAE figures released on Wednesday dashed those expectations: economic activity edged up just 0.1% month-on-month on a seasonally adjusted basis and fell 1.7% year-on-year. Activity in the January-August period, however, remained 1.2% higher than in the corresponding timeframe of the previous year. Five of the sectors monitored by the EMAE experienced growth in August relative to the same month in 2025. Mining and quarrying exhibited a notable increase, rising 11.1% year-on-year, while the sectors of electricity, gas, and water experienced a growth of 4.3%. These were the two sectors that provided the greatest contribution to overall growth. Meanwhile, ten sectors experienced year-on-year declines. Fishing experienced a significant decline, decreasing by 15.7%, a result that was notably affected by seasonal factors. The sectors exhibiting the most significant negative contributions included manufacturing, which declined by 3.2% year-on-year, and wholesale and retail trade and repairs, experiencing a contraction of 3.5%.
A technical recession is typically characterised by two successive quarters of decreasing GDP. Argentina’s economy experienced a contraction of 0.6% in the second quarter of 2026, with the pronounced downturn in July significantly hindering performance in the third quarter. Analysts determined that economic activity would have required an 8.5% month-on-month increase in September to avert a recession. Such growth would be unprecedented in Argentina’s recent history outside the pandemic period and particularly challenging to realise under President Javier Milei’s administration, characterised by fiscal austerity and monetary tightening. Gonzalo Carrera articulated on X that while the EMAE serves as an estimate of GDP subject to revisions as additional data emerges, “it seems highly unlikely that the economy will recover enough in September to avoid a recession.” In fact, he stated, “even avoiding a sharp contraction seems difficult.”
Despite the EMAE’s month-on-month increase of 1.5% in September, he noted that the quarter would ultimately conclude with a contraction of 2.3%. Similarly, Gabriel Caamaño, an economist at consulting firm Outlier, observed that market analysts “will once again revise their growth forecasts downward” for 2026 following the disappointing data. The September Market Expectations Survey, a monthly poll conducted by the Central Bank, indicated a significant downward revision subsequent to the figures reported in July. The survey projected economic growth of 1.5% for 2026, a considerable downgrade from the 2.1% forecast just one month earlier. The September EMAE figures are set to be released on November 24, with third-quarter GDP data scheduled for publication on December 16.
