INSUBCONTINENT EXCLUSIVE:
National Institute of Statistics and Census (INDEC).While this represents a recession, the contraction was significantly less severe than
projections from international organizations, which anticipated a decline of around 3.5%, signaling unexpected resilience amid a dramatic
economic and social crisis characterized by hyperinflation, currency devaluation, declining real wages, and increasing poverty.In 2023,
annual inflation soared to 211.4%, the highest rate in the world, while more than half the population lived below the poverty line
When Milei took office in December 2023, he immediately implemented a stabilization program.This program focused on achieving fiscal balance
and eliminating monetary issuance
(Photo Internet reproduction)Quarterly Performance Shows Recovery TrajectoryThe annual contraction masks a remarkable turnaround in economic
performance throughout 2024:Q1 2024: GDP contracted sharply by 5.1% year-on-year, with household spending falling 6.7% and fixed investment
plummeting 23.4%Q2 2024: Contraction moderated but remained significantQ3 2024: Economy expanded by 3.9% despite ongoing austerity
measuresQ4 2024: GDP grew 2.1% year-on-year, with private consumption rising 2.8% and investment increasing 1.9%This progression from steep
public worksManufacturing fell 9.2% as domestic consumption weakenedCommerce dropped 7.3% amid tightened household budgetsExpanding
Sectors:Agriculture, livestock, hunting and forestry surged 31.3%, showing remarkable recovery from the severe drought of 2023Mining and
has been strict fiscal discipline
Between January and September 2024, Argentina achieved a fiscal surplus for the first time in many years
expenditure (down 30% in real terms)Elimination of subsidies for energy and transportationReduced transfers to provincesBelow-inflation
public sector requirements, fundamentally breaking with decades of deficit financing through money printing.Inflation Control Shows
25.5% in December 2023By December 2024, monthly inflation had fallen to 2.4%The country effectively exited hyperinflation territoryThis
disinflation process was made possible by the combination of fiscal surplus, monetary restraint, and the maintenance of a controlled
notable improvement in 2024:Exports increased 23.2% for the year and 27.1% in Q4Imports decreased 10.6% for the year but increased 9.7% in
played a crucial role, with some estimates showing agricultural output increasing by over 80% from the depressed levels of 2023.Social
Indicators Show Mixed ResultsThe economic transition took a significant toll on Argentine society:Poverty rate reached 57.4% in January
2024, the highest since 2004However, by Q3 2024, poverty had fallen to 38.9% (lower than 2022 levels)Real wages began showing positive
monthly growth averaging 2.4% between April and AugustUnemployment remained relatively stable at 7.7% in Q1 2024Despite the economic
hardship, 53% of Argentinians reported believing their standard of living was improving by the end of 2024, with trust in government having
doubled since 2023.Outlook for 2025 and BeyondThe 1.7% contraction, while painful, has positioned Argentina for stronger growth in 2025
Various forecasts predict:Economic growth between 3.5% and 6% in 2025Inflation expected to fall below 30% in 2025Continued recovery in real
wages and private consumptionIncreased investment as business confidence improves and capital controls are gradually dismantledThe
themselves but their context
registered in the second half of 2024 suggests that Argentina may be breaking its long cycle of crisis and temporary recovery.The relatively
modest 1.7% contraction, compared to projections of 3.5%, indicates that the economic cost of stabilization was less severe than
anticipated.This outcome strengthens the case that orthodox macroeconomic policies, while initially painful, can lay the groundwork for
sustainable growth even in economies with deep structural challenges.
