Argentine forecasters say the economy is already in recession and cut their 2026 growth forecast to 1.5%

Analysts in the Argentine central bank's monthly survey of market expectations (REM) now say the economy has entered recession, Ámbito reported. They estimate a 1% contraction in output between July and September compared with the previous quarter. They now expect gross domestic product (GDP) to grow only 1.5% in 2026.

The forecasts have fallen quickly. In the previous survey, analysts estimated that GDP had already contracted 0.9% in the second quarter and expected 1.1% growth in the third quarter and 2.1% growth for the year. A second quarterly contraction would meet the common definition of a recession.

Inflation is moving in the wrong direction. Forecasters expect monthly consumer inflation of 1.9% for September, higher than in August, Clarín reported. Respondents expect the exchange rate and interest rates to stay broadly stable.

This combination is the most difficult one for President Javier Milei's programme. His government has relied on tight money and a managed peso to bring inflation down. A slowing economy is expected under that kind of policy. What is not expected is monthly inflation rising again while output falls. That points to price pressure from outside the monetary base (the money the central bank itself creates), including imported energy costs during the Gulf war.