Overview
- INDEC's July EMAE showed a 2.9% month-on-month seasonally adjusted drop and a 1.4% year-on-year fall, the largest monthly fall since April 2020, a result reported across multiple outlets on Sunday.
- Following that data, JP Morgan cut its 2026 GDP forecast to 1.5% and projected an annualized 4% contraction in Q3, a path that would create two consecutive quarterly declines if August and September also fall.
- Private forecasters calculate activity would need roughly a 6% cumulative gain in August and September to avoid the technical recession, making those monthly releases the immediate market focus.
- The July slump was uneven: domestic-demand sectors such as commerce, manufacturing and construction weakened sharply while export-facing sectors like mining, energy and fishing expanded.
- President Javier Milei rejected the recession reading and criticized seasonally adjusted series, and analysts warn that persistent weak activity plus high poverty and stagnant employment will constrain consumption and complicate policy choices ahead of 2027.