Market analysts concur that the Argentine economy is projected to expand at a rate significantly lower than previously anticipated in 2026, with numerous assessments indicating that the economy may already be experiencing a recession. Those conclusions arise from the September Market Expectations Survey (in Spanish, REM), a monthly poll conducted by the Central Bank. The analysis compiles projections from over 40 contributors, including local and international consulting firms, research institutions, and financial organisations, concerning the key variables of the domestic economy. The report projected a deterioration in economic prospects for the third quarter and the remainder of the year. Alongside diminished growth prospects, there is an anticipated increase in both inflation and unemployment rates. The sole variable they regard as immutable is the exchange rate between the U.S. dollar and the peso.
The report estimated that seasonally adjusted gross domestic product contracted 1% in the third quarter of 2026, reflecting a 2.1 percentage point adjustment relative to the prior month’s growth projections of 1.1%. Given that the second quarter of the year exhibited a 0.6% seasonally adjusted contraction, a failure to achieve growth in the third quarter would signify that the economy is officially in a “technical recession.” Recovery, however, is anticipated for the final quarter of the year, with a projected growth of 1.8%, reflecting a 0.5 percentage point increase relative to the prior survey (+1.3%). That did not stop the forecast for the remainder of the year from being adjusted downward as well. Projected growth for 2026 in the August REM was 2.1% year-on-year. The most recent update has reduced that figure to 1.5%. One of the factors contributing to the downward correction is the underwhelming performance of real economy sectors, including industry, commerce, and construction.
This decline is not being counterbalanced by the export boom in minerals, energy, and agriculture. One of the sectors most severely impacted is manufacturing. Following a 5% month-on-month seasonally adjusted decline in July – the most significant decrease since March 2025 – a report released on Wednesday indicated a 1.9% increase in August. The improvement, however, is insufficient to offset the losses incurred in the preceding month. In comparison to December 2025, there has been a decline of 1.6%, and a more significant drop of over 7% (123.5) since the inauguration of President Javier Milei. Labour market expectations have deteriorated relative to the prior survey. Analysts have projected that unemployment will rise to 7.5% in the third quarter of 2026, reflecting an increase of 0.2 percentage points compared to the prior assessment.
For the fourth quarter, the anticipated unemployment rate increased to 7.7%. Concerning inflation, the forecast indicates a rate of 1.9% for September, reflecting an uptick from the prior 1.8%. Projections suggest that the annual figure will culminate at 30%. August projections indicated that annual inflation stood at 27.7%. Exchange rate projections represented the sole indicator that exhibited an enhancement relative to earlier estimates. The rate for October is anticipated to conclude at AR$1,545 per U.S. dollar, approximately AR$20 lower than the prior survey. The December rate is projected to be AR$1,614, reflecting an 11.5% year-on-year increase.
