Argentina Might Have Entered a Recession in the Midst of Milei’s ‘Shock Therapy’

Argentina appears to have entered into a recession despite President Javier Milei’s extreme restructuring of the country’s economy.

Argentina’s economy shrank 1.4% in the final quarter of 2023, according to INDEC, the country’s national statistics agency.

The full-year figures for 2023 indicate a 1.6% decline, exacerbating concerns about the country’s economic stability. Argentina’s GDP shrank 5.0% during the second quarter of the year, followed by a 0.8% dip in the third quarter.

Contraction has hit economic sectors across the board, particularly those directly linked to consumer spending. Wages and pensions remain low,  casting doubts on GDP growth for 2024.

Javier Milei won the presidency with a message of radical economic change. His planned policies include closing Argentina’s central bank and devaluating the nation’s currency.

Some of Milei’s measures seem to have been successful. The government’s financial position has improved, and inflation has been curbed to some extent. Analysts remain skpetical, however.