The data provided by INDEC indicated an improvement trend that was expressed in a 3.9 percent rebound.
Tomás Modini
@ModiniTomas
Argentina’s economic activity increased by 3.9 percent in the third quarter of 2024 compared to what happened in the previous three months. According to the INDEC report, the growth was mainly due to a strong increase in investment, over 12 percent, and private consumption, which exceeded 4.6.
Despite this quarterly advance, the year-on-year comparison revealed a 2.1 percent drop in the Gross Domestic Product (GDP), which was the result of the accumulated challenges in key sectors of the economy such as construction and the manufacturing industry.
The two important drivers of growth
Taking into account the period between July and September, the third quarter of the year, there were two fundamental pillars that explain the statistics released by INDEC.
Investment registered a rise of 12 percent due to the fact that it reflected greater productive and business activity. And private consumption showed a recovery in the demand for goods and services by households.
Public consumption grew by 0.7 percent, while exports advanced by 3.2. On the other hand, imports increased by 9.1, which showed a reactivation in the purchase of inputs in relation to local production.
Regarding the analysis by sectors, those that had a better performance were agriculture, livestock and forestry (13.2 percent), hotels and restaurants (9.9) and mining (6.6). Construction fell by 14.9 percent, wholesale and retail trade by 6.1 percent, and manufacturing by just under 6 percent.
The economists’ perspective
To evaluate the results of these data, there were specialists in the field who showed an optimistic view of the future and possible government policies. For example, Antonio Aracre, who was an advisor to former President Alberto Fernandez, said: “Private consumption and investment explain a good part of this growth, while positive imports reflect a productive rebound.”
Aldo Abram, director of the Libertad & Progreso Foundation, for his part highlighted the result as better than expected and said that “we are not yet in a V-shaped recovery, as the government expected, but this evolution is much better than a slow or pipe-shaped recovery.”
Other analysts such as Camilo Tiscornia, belonging to C&T Asesores Económicos, stated that “the reactivation of consumption confirms positive trends seen in indicators such as real wages” and that “a very strong recovery is seen.”
The government’s reaction and expectations for 2025
The government has received growth with optimism. Martín Vauthier, director of the Bank of Investment and Foreign Trade (BICE) and close to the Minister of Economy, Luis Caputo, said that the results exceed the initial forecasts and bring the economy closer to the level of the last quarter of 2023.
The official projections that the presidential leadership has for next year foresee a growth of 5 percent, based on a greater consolidation of consumption and investment.
The Argentine economy showed positive signs after a prolonged period of recession. In any case, economists warn that it will be essential to solve problems such as exchange restrictions and inflation, in addition to the situation of salaries and their value, to sustain the recovery.
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