Although September’s economic activity figures have yet to be released, August’s data suggest that Argentina is on track to enter a technical recession in the third quarter of the year.
The latest figures reflect weak economic activity, as measured by the Monthly Economic Activity Estimator (EMAE), an early indicator of quarterly GDP published by the national statistics agency INDEC.
In July, the EMAE plunged nearly 3% month-on-month, marking the steepest decline since the pandemic and the first drop of that magnitude in at least two decades that was not triggered by a peso devaluation or an international crisis.
In August, economists broadly expected economic activity to rebound. Although the recovery was not expected to fully offset the previous month’s losses, it was forecast to make up for a substantial portion of the decline.
The EMAE figures released on Wednesday dashed those expectations: economic activity edged up just 0.1% month-on-month on a seasonally adjusted basis and fell 1.7% year-on-year. Activity in the January-August, however, remained 1.2% higher than in the same period last year.
Five of the sectors tracked by the EMAE grow in August compared with the same month in 2025. Mining and quarrying stood out, rising 11.1% year-on-year, followed by electricity, gas and water, up 4.3%. These were the two sectors that contributed the most to overall growth.
Meanwhile, ten sectors posted year-on-year declines. Fishing recorded the steepest drop, falling 15.7%, although the result was heavily influenced by seasonal factors.
The sectors with the largest negative contributions were manufacturing, down 3.2% year-on-year, and wholesale and retail trade and repairs, which contracted 3.5%.
Why Argentina cannot avoid a technical recession
A technical recession is generally defined as two consecutive quarters of declining GDP. Argentina’s economy contracted 0.6% in the second quarter of 2026, and July’s sharp downturn became a major drag on third-quarter performance.
Analysts at Banco Provincia’s Economic Research Department calculated that economic activity would have needed to grow 8.5% month-on-month in September to avoid a recession.
Such growth would be unprecedented in Argentina’s recent history outside the pandemic period and particularly difficult to achieve under President Javier Milei’s administration, marked by fiscal austerity and monetary tightening.
Gonzalo Carrera, an economist at consulting firm Equilibra, explained on X that although the EMAE is an estimate of GDP that is revised as more information becomes available, “it seems highly unlikely that the economy will recover enough in September to avoid a recession.”
In fact, he said, “even avoiding a sharp contraction seems difficult.” Even if the EMAE rose 1.5% month-on-month in September, he added, the quarter would still end with a 2.3% contraction.
Para dimensionar el mal dato de actividad: para evitar la recesión la economía debe crecer más de 8,5% mensual en sep-26.
— Gonzalo Carrera (@Gonzaacarrera_) October 21, 2026
Si bien el EMAE es un estimación del PBI y se corrige hacia atrás con más información, luce muy improbable que en septiembre la economía se recupere de forma… pic.twitter.com/HIMWPpWm6s
Similarly, Gabriel Caamaño, an economist at consulting firm Outlier, noted that market analysts “will once again revise their growth forecasts downward” for 2026 following the disappointing data.
Mucho peor de lo esperado el EMAE de agosto de 2026, cuya serie con ajuste estacional casi no se recuperó respecto de la caída fuerte de julio. Además está última prácticamente no se modificó. La serie original quedó 1,7% abajo de agosto de 2025 y el acumulado interanual en 1,2%.… pic.twitter.com/onxcALBb5q
— Gabriel Caamaño (@GabCaamano) October 21, 2026
The September Market Expectations Survey (REM), a monthly poll conducted by the Central Bank, had already shown a sharp downward revision following July’s figures.
The survey projected economic growth of 1.5% for 2026, a considerable downgrade from the 2.1% forecast just one month earlier.
The September EMAE figures will be released on November 24, while third-quarter GDP data are scheduled for publication on December 16.
La entrada Argentina’s recession looks inevitable after August data se publicó primero en Buenos Aires Herald.