The economy managed by far-right President Milei is experiencing its worst performance since 2004.

On Monday, JPMorgan warned that Argentina’s economy is heading toward recession and said the Argentine economy had its worst performance in July since 2020.

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The U.S. bank cut its forecast for Argentine GDP growth in 2026 from 2.7% to 1.5%, representing a major setback for far-right President Javier Milei, who promised macroeconomic stabilization.

The Monthly Economic Activity Estimator (EMAE) recorded a 1.4% year-over-year decline in July, driven by severe sectoral drops such as industrial activity (-4.6%) and commercial activity (-5.1%).

“We expected weak activity data in July, in line with the context of weakness that characterized the second quarter. However, the reported contraction far exceeded our forecast of approximately -1% month over month,” JPMorgan said.

The U.S. financial institution emphasized that the July 2026 figures represent the worst performance since 2004, excluding what happened in the 2008 financial shock, the 2018-2019 crisis, and the 2020 pandemic.

The report projects a 4% contraction for the third quarter and maintains its growth expectation for 2027 at 2.5%, conditioned by deep sectoral disparities.

Thanks to Milei
More than 15 million people live in
poverty in Argentina:
Urban poverty rises to 32.3%, the highest rate since 2024.
This means more than 4 points higher than in the second half of 2025.
pic.twitter.com/YBFYe8fDly

— ALEXANDER (@Rowlandsel) September 27, 2026

In contrast with JPMorgan’s forecast, the expectations report from the Central Bank of Argentina, which is based on interviews with businesspeople, assumes that the Argentine economy will grow by 2.1% in 2026. However, this figure also represents a decline from the 4.4% growth previously expected in 2025.

Similarly, when presenting his budget proposal to Congress, Milei reduced his 2026 GDP growth projection from 5% to 3%. For the following year, he optimistically assumes that GDP will expand by 4%.

JPMorgan’s analysis warns that Argentina’s current economic growth path presents serious imbalances because it has failed to reactivate domestic wholesale and retail trade, although mining and energy exports are contributing to higher GDP.

These difficulties are compounded by continued problems in manufacturing and construction, reduced consumption due to inflation that was higher than expected in the first quarter, and a slowdown in credit driven by rising delinquency.

The productive stagnation recorded in July has also been accompanied by a deep deterioration in household incomes compared with inflation.

According to the latest publication of the Permanent Household Survey (EPH), conducted in September, poverty affected 24.4% of households and 32.3% of people (15 million) in the first half of 2026, while extreme poverty stood at 5.6% of households and 7.5% of the population (3.5 million).

For its part, JPMorgan estimates that nearly one-third of Argentina’s population, about 9.7 million people, remains below the poverty line because of the gap between household incomes and the cost of living.

Compared with the last quarter of 2025, the poverty basket increased by 19.6%, while per capita household income rose by 11.5%. This showed that Milei’s goal of achieving inflation below 1% has completely failed.

teleSUR/ JF

Sources: JPMorgan – AgendAR

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