Argentina’s economy grew more than expected in February

Argentina’s economy grew more than expected in February, solidifying the country’s bounceback under President Javier Milei a week after he clinched a US$20-billion deal with the International Monetary Fund.

Economic activity rose 5.7 percent from the same month a year ago, compared with the median estimate of 5.5 percent, according to government data published Tuesday. On the month, activity rose 0.8 percent after a 0.6 percent rise in January. 

The financial sector led year-on-year growth, while the social services sector shrank.

South America’s second-largest economy has been showing consistent signs of momentum after two quarters of contraction exacerbated by Milei’s austerity policies in the first half of 2024. Between October and December, exports, government and consumer spending and capital expenditures led more-than-expected quarter-on-quarter growth.

Annual inflation has cooled to 55.9 percent in March from 211 percent during Milei’s first month in office. The IMF granted Argentina a US$20-billion financing package on April 11, with $12 billion upfront that allowed them to lift crucial capital restrictions, the foremost impediment to the country’s sustained growth. 

The country also relaxed currency controls with limited impact on the currency’s value, another attractive feat for investors eyeing the South American economy.

Economists surveyed by the Central Bank in March estimate Argentina will grow five percent in 2025.