Economy contracted in June, recession grinds on

Argentina’s economy unexpectedly contracted in June, shrinking for the fourth time in six months as a deep recession weighs down early signs of recovery.

Economic activity dropped 0.3 percent in June from May, compared with analysts’ expectations for 0.4 percent growth. From a year ago, activity fell 3.9 percent, according to government data published Wednesday. Almost all sectors in Argentina’s economy posted annual declines except for farming, fishing and mining.

Argentina’s economy is showing incipient signs of recovery from recession, a turnaround that would be key for President Javier Milei’s bid to build momentum before next year’s midterm elections. Wage growth has edged above inflation for three straight prints on a monthly basis through June. Consumer spending and the construction sector both posted gains in recent months.

Those gains, however, are far overshadowed by the towering losses Argentina’s economy suffered in the months prior as it entered recession with inflation currently over 263 percent. Wages, retail sales and blue-collar industries are all still down so far this year. Economists surveyed by Argentina’s Central Bank estimate gross domestic product will contract 3.7 percent in 2024.