In February, Argentina’s economy contracted by 3.2% compared to the previous year, a decrease that was less than expected by analysts surveyed by Bloomberg. This marks the fourth consecutive month of decline, with President Javier Milei’s economic shock therapy plan taking effect. Since taking office in December, Milei has implemented measures such as lifting price controls, freezing public works, and devaluing the currency in an effort to combat inflation.
Despite these efforts, economists are cautious about the sustainability of the surplus achieved in the first quarter of 2023. They predict a 3.5% contraction in gross domestic product for the year based on a poll conducted in March. Small- and medium-size businesses experienced a 12.6% decline in spending during March, while construction activity decreased by 24.6% annually in February.
Milei’s optimism notwithstanding, concerns about the economic impact of austerity measures remain high among experts. Despite some successes like achieving a quarterly fiscal surplus for the first time since 2008, there is still much work to be done to stabilize Argentina’s economy and address longstanding issues like inflation and unemployment rates that have been consistently above average for years now.