Argentina’s economy increased faster than predicted in February, cementing President Javier Milei’s rebound a week after he signed a US$20-billion IMF pact. According to government figures released Tuesday, economic activity climbed 5.7 percent from the same month a year ago, compared with the median expectation of 5.5 percent. Monthly activity grew 0.8 percent after 0.6 percent in January.
Financial services led year-over-year increase, while social services shrank. After two quarters of contraction caused by Milei’s austerity policies in the first half of 2024, South America’s second-largest economy has been growing. Exports, government and consumer spending, and capital expenditures drove stronger quarterly growth between October and December.
Annual inflation dropped from 211 percent in Milei’s first month to 55.9 percent in March. On April 11, the IMF approved Argentina a US$20-billion credit package including $12 billion upfront to eliminate capital restrictions, the biggest obstacle to sustained growth.
Investors interested in the South American economy also liked the country’s currency liberalization, which didn’t affect its worth. The Central Bank questioned economists in March and predicted 5% growth in Argentina in 2025.