Argentina’s economy extended expansion as new IMF accord nears

President Javier Milei oversaw a second straight quarter of growth in Argentina at the end of 2024, boosting his odds of a strong showing in midterm elections later this year as markets await a new programme with the International Monetary Fund.

Gross domestic product expanded 1.4 percent in the three months through December compared with the previous quarter, better than the 1.3 percent median estimate of analysts. From a year ago, Argentina’s economy grew 2.1 percent in the last three months of 2024, according to government data published Wednesday. The median estimate of economists surveyed by Bloomberg was for growth of 1.7 percent.

Argentina’s economy grew 4.3 percent quarter-on-quarter between July and September 2024, a greater-than-expected rebound after three quarters of contraction. Signs of recovery continue to surface. Wages have surpassed inflation since April, job growth is slowly picking up, and private estimates indicate poverty is declining after spiking when Milei took office.

A new agreement with the International Monetary Fund (IMF) is just around the corner, with a vote in the Chamber of Deputies expected later Wednesday to grant its preliminary approval. The loan, which is still being formally negotiated, would help to beef up the central bank’s depleted coffers to allow Argentina to lift capital controls, the foremost impediment to the country’s sustained growth.

Economists surveyed by Argentina’s Central Bank expect the economy to grow 4.8 percent in 2025.