Overview
- INDEC reported that monthly activity fell 2.9% in July and that GDP contracted 0.6% quarter‑on‑quarter in April–June, creating a negative carry into the third quarter.
- The decline in July was concentrated in hard‑hit sectors, with manufacturing down about 5% and construction down about 4.6%, while private and public consumption and investment also weakened.
- Private analysts say August and September would each need roughly 3% monthly rebounds to avoid two consecutive quarterly declines, and the UTDT leading index put recession odds above 80% for coming months.
- The government describes the shock as transitory, but economists argue for targeted stimulus even as higher global rates, rising sovereign yields and pressure on BCRA reserves tighten the 2027 financing outlook.
- EMAE revisions could modestly ease the third‑quarter drag, yet August and September data will be decisive for whether the fall proves temporary or signals a longer contraction that worsens jobs, incomes and public revenues.