Argentina's economy shrinks 1.8 pct, less than expected

BUENOS AIRES

Argentina's gross domestic product shrank by 1.8 percent in 2024, falling less than expected during President Javier Milei's first year in office, according to official statistics.

The contraction announced by the national statistics agency Indec was far smaller than the 3.6 percent forecast by the World Bank.

After sinking into a deep recession in the first three quarters of 2024 when Milei began implementing a drastic austerity program, the economy grew by a bullish 5.5 percent year-on-year in December, Indec said.

The libertarian Milei hailed the data on the social network X as the product of the "largest fiscal adjustment in history."

Tuesday's GDP figures are the latest in a slew of positive economic indicators for the right-winger, who brandished a chainsaw on the campaign trail in 2023 as a symbol of his plans to restore fiscal discipline and tame chronic inflation.

He suspended public works, laid off thousands of public servants, gutted state agencies and reduced aid to provincial governments as part of his bid to shrink the government and revive Argentina's long-ailing economy.

In January, inflation, the perennial bugbear of Argentines, fell to 2.2 percent, its lowest level in 4.5 years.

Milei has been cited as an inspiration by US President Donald Trump's billionaire consigliere Elon Musk, who received a gift of a chainsaw from Milei at last week's Conservative Political Action Conference (CPAC) in Maryland.

The IMF has forecast the Argentine economy will grow by 5 percent in both 2025 and 2026.