Argentina’s economy grew during election cycle with export gains

Argentina’s economy expanded in the third quarter amid a volatile election cycle as exports, capital investment and consumer spending picked up while imports slowed due to a dollar shortage. 

Gross domestic product grew 2.7% in the third quarter compared to April-June period, according to official government data published Friday. Activity contracted 0.8% from a year ago, slightly below the median estimate of economists surveyed by Bloomberg.

Exports drove growth, picking up 2.1% on a quarterly basis. Consumer spending, partly aided by the former government’s generous campaign spending and handouts, also nudged up despite surging inflation. 

While Argentina largely defied the most bearish forecasts for growth this year, the economy is still on pace to contract 1.4% for all of 2023, according to the central bank’s most recent survey of economists. Even new President Javier Milei is warning citizens the outlook ahead for 2024 is more daunting after his administration devalued the peso 54% overnight, initiated spending cuts and scrapped price control programs. 

Economists surveyed by the central bank see GDP falling 2.4% in 2024 with inflation over 189% by the end of next year.