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ECONOMY | 29-06-2024 13:09

Argentina’s economy extended downturn in April amid Milei’s cuts

Economy slumped slightly in April, marking four of the last five months in decline since President Javier Milei took office.

Argentina’s economy slumped slightly in April, marking four of the last five months in decline since President Javier Milei took office as he marches on with his shock therapy austerity campaign.

Economic activity fell 1.7 percent in April from a year ago, less than expectations for a 3.5 percent drop, according to analysts surveyed by Bloomberg. On a monthly basis, activity declined 0.1 percent, according to government data published Friday.

Construction, manufacturing and retail sectors led the declines. Argentina entered a recession in the first quarter of the year as consumer spending plunged, unemployment rose and public works were effectively frozen.

Congress approved Milei’s sweeping hallmark legislation in the early hours of Friday, sending a positive signal to markets amid slumping activity. The bill is expected to resuscitate Argentina by deregulating vast swathes of the economy and making the labour market more flexible, as well as boosting tax revenues.

Economists surveyed by the Central Bank estimate GDP will fall 3.8 percent this year, followed by 3.4 percent growth in 2025.

by Manuela Tobias, Bloomberg

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