Overview
- Official data show GDP fell 0.6% quarter-on-quarter in Q2 2026 and the INDEC reported a 2.9% month-on-month drop in the EMAE for July, with activity down 1.4% year-on-year.
- The slump is concentrated in domestic demand, with private consumption down 2.4% in Q2, public consumption down 2.3%, and gross investment edging down 0.9%, leaving investment about 13% below 2023 levels.
- Key sectors led the slide in July as manufacturing fell roughly 5% month-to-month and construction fell about 4.6%, deepening job losses and reducing factory capacity use.
- Markets reflected the stress with the country risk index above 600 points and higher borrowing costs, while the government faces internal debate over targeted stimulus versus maintaining fiscal surplus and tight monetary policy.
- Households are feeling the impact: poverty rose to about 32.3%, unemployment is near 7.9%, loan delinquency climbed, and the outcome of August and September activity and the cost of external financing will shape risks to 2027 plans.