Argentina Activity Falls 1.7% in August, Raising Recession Risk

Overview

• The national statistics agency Indec released data Wednesday showing the monthly activity indicator (Emae) fell 1.7% year‑on‑year in August while rising just 0.1% from July, leaving Argentina exposed to a second consecutive quarterly contraction.
• The downturn is highly uneven: mining, oil and electricity and record agro-exports provided the only real support while fishing, manufacturing, wholesale and retail and construction posted steep annual declines.
• Economy Minister Luis Caputo pointed to the month‑to‑month uptick and a trend‑cycle measure above the late‑2023 level and touted record agro export volumes as a buffer.
• Independent economists and analysts say deep spending cuts and Milei administration reforms have weakened domestic demand and employment in labor‑intensive sectors, eroding the recovery’s breadth.
• A new external shock has raised risks for the region as Brent crude pushed past US$110–113 after Middle East attacks, spurring global investor caution that depressed equities, lifted Brazilian rates and could squeeze financing costs for Argentina.