Argentina touts quarterly economic growth

Market: Crude oil, Metals, Natural gas
17/12/24

Argentina's macroeconomic conditions continue to stabilize, with growth picking up and inflation trending down.

The economy expanded by 3.9pc in the third quarter of the year compared to the previous three months, according to preliminary data from the statistics agency (Indec). It was the first quarter-on-quarter growth since President Javier Milei took office a year ago during a deep recession with a promise to overhaul the long-struggling economy.

The economy contracted by 1.9pc in the fourth quarter of 2023, by 2.1pc in the first quarter of 2024 and by 1.7pc in the second quarter.

While the economy is still down by 2.1pc compared to a year earlier, the government presented the data, together with falling inflation, as evidence that Milei's strategy to deregulate and shrink the state is working.

Inflation in November was 2.4pc, a huge decline from the 25pc when Milei took office in December 2023. Accumulated inflation through November was 112pc.

According to Indec, private consumption was up by 4.6pc from quarter to quarter and investment by 12pc. The country has had a fiscal surplus for nine months. The currency has stabilized after a brutal devaluation early in 2024 of more than 50pc.

Exports grew by 3.2pc from the second quarter and are the most positive economic indicator so far this year. Exports in the first three quarters of 2024 were up by 20pc compared to a year earlier.

The energy sector in the GDP calculation increased by only 0.4pc in third quarter, but it plays an important role in the trade balance. The country will have a trade surplus this year close $20bn compared with a $6.9bn deficit in 2023, according to the central bank.

Argentina registered its first energy surplus in 15 years in the first half of 2024, exporting $4.81bn and importing $3.79bn. Crude exports were up by 60pc compared to 2023.

Oil and gas trade organization Ceph forecasts an energy surplus of $25bn by 2030, based on projections of crude output of 1.5mn b/d and natural gas at 230mn m³/d.

The government has reduced from 18 to eight the number of cabinet ministries and eliminated hundreds of regulations. Deregulation and transformation minister Federico Sturzeneggar announced in early December that approximately 4,500 regulations would be eliminated in 2025.

But the austerity measures have caused a spike in poverty, with more than 50pc of the population living below the poverty line, up from 41.7pc in December 2023.

By Lucien Chauvin

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14/05/25

Mauritania weaves GTA project into industrial strategy

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14/05/25

Opec downgrades non-Opec+ supply growth forecasts

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Quotas most likely option for DRC cobalt export restart

14/05/25

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14/05/25

Quotas most likely option for DRC cobalt export restart

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Indonesian cobalt output capacity to double by 2027

14/05/25

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14/05/25

Indonesian cobalt output capacity to double by 2027

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