Overview
- The national statistics office reported on Thursday that monthly economic activity (EMAE) fell 2.9% month‑on‑month in July and that GDP contracted 0.6% versus the prior quarter, leaving the economy close to a technical recession.
- Manufacturing fell about 5% in July and construction dropped roughly 4.6%, and those sectoral losses drove a broader weakness in consumption and investment that weighed on overall activity.
- Private consultancies estimate Argentina would need roughly 3% monthly growth in both August and September to avoid two negative quarters, a rebound most analysts view as highly unlikely given early indicators.
- The government stresses the drop reflects transitory factors and points to cumulative EMAE gains and a fiscal and financial surplus, but rising sovereign spreads and higher bond yields are tightening market financing and pressuring reserves.
- Key near‑term milestones to watch are the August and September activity readings, the 2027 budget path, and any shifts in market access because those outcomes will determine whether policy can cushion the slowdown or the contraction extends.