Argentine economy contracted 1.6% in 2023

BUENO AIRES—Argentina’s battered economy contracted 1.6 percent in 2023, the INDEC statistics agency said Thursday.

For December, the drop was 4.5 percent compared to the same month a year earlier, and 3.1 percent from November, it said.

Financial services, manufacturing, wholesale and retail were among the sectors hardest hit, said an INDEC report.

Argentina was hit by severe drought in 2023 that hurt its agroexport industry and subtracted 3.0 percentage points from GDP, according to official data.

Last month, the International Monetary Fund — to which Argentina owes $44 billion — revised its forecast downward with a contraction of 2.8 percent in 2024.

READ: Argentina sharply devalues its currency and cuts subsidies

Ultra-liberal new President Javier Milei was elected on promises to slash state spending.

Since coming to office in December, he has devalued the peso by over 50 percent, cut tens of thousands of public jobs and halved the size of the government.

In January, Argentina reported its first monthly budget surplus in 12 years, while boosting the country’s meager foreign currency reserves from $21 billion to $27 billion.

Annual inflation has hit 254 percent.

READ: Argentina’s annual inflation soars to 211.4%, highest in 32 years

On Thursday, IMF Deputy Managing Director Gita Gopinath held what she termed an “excellent and substantive meeting” with Milei on “how best to take the country forward,” during a two-day visit to the country.