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Argentina

Argentina's economy slides toward recession as consumption weakens under Milei

Falling household spending and business closures test the government's austerity programme a year before the 2027 presidential election.

Photo: San Luis Obispo Tribune

What happened

Argentina's economy likely slipped into recession in the third quarter, according to economists. San Luis Obispo Tribune Household consumption fell 2.7% in the first nine months of 2026 from a year earlier. Adalytica Sales at family-owned firms such as the Eseka factory in Buenos Aires have fallen around 40% since President Javier Milei took office. San Luis Obispo Tribune About 32,300 businesses, roughly 6% of companies in Argentina, closed between December 2023 and July, according to think-tank Fundar. San Luis Obispo Tribune+1

Around it

Household consumption accounts for about two-thirds of gross domestic product, so a sustained drop in spending weighs on the wider economy. San Luis Obispo Tribune+1 Weak demand and cheaper imports, which followed the lifting of trade restrictions, have hit local producers. San Luis Obispo Tribune+1 Inflation has cooled and macroeconomic stability has improved even as activity weakens. Adalytica

What comes next

The presidential election is scheduled for October 2027, when Milei is widely expected to seek a second term. San Luis Obispo Tribune+1

Sources

  1. San Luis Obispo TribuneArgentina's austerity-hit economy reels towards recession, testing Milei ahead of 2027 vote
  2. AdalyticaArgentina recovery slows as consumption weakens
  3. Sacramento BeeArgentina's austerity-hit economy reels towards recession, testing Milei ahead of 2027 vote

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