Market analysts and economic experts across Argentina are in broad agreement that the national economy is on track to grow at a significantly slower pace than originally estimated for 2026. A mounting chorus of financial authorities, independent research centers, and private consulting firms now warns that the country is either teetering on the edge of or already actively experiencing an economic recession.
These sobering conclusions emerge directly from the latest findings of the September Market Expectations Survey, widely known by its Spanish acronym REM. Published on a monthly basis by the Central Bank of Argentina, the survey serves as a vital barometer for the nation’s economic health, capturing comprehensive forecasts regarding the trajectory of local financial and macroeconomic variables.
The latest polling data gathers forward-looking projections made by more than 40 key market participants. This diverse group of contributors includes prominent local and international consulting firms, specialized research centers, and major financial entities, all of which lend their analytical weight to tracking the pulse of the local economy.
The comprehensive report paints a challenging picture, projecting a clear deterioration in economic prospects for both the third quarter and the remainder of the year. Beyond the downward revisions to overall economic growth, the survey respondents estimate a concurrent rise in domestic inflation and a worsening labor market marked by higher unemployment rates. Interestingly, within this landscape of widespread downward adjustments, the only major macroeconomic variable that survey participants expect to remain relatively stable is the official United States dollar-to-peso exchange rate.
Is the Economy Entering a Technical Recession?
The most striking revelation within the September REM report centers on the trajectory of the nation’s gross domestic product. Economists and analysts surveyed estimated that the seasonally adjusted GDP contracted by 1% during the third quarter of 2026. This represents a substantial 2.1 percentage point downward correction compared to the previous month’s survey, which had optimistically projected a 1.1% expansion for the same period.
When evaluated within the broader timeline of the year, these figures carry significant technical weight. Given that the second quarter of 2026 already recorded a 0.6% seasonally adjusted contraction, a subsequent quarter of zero or negative growth squarely fulfills the standard definition of a technical recession. For businesses, policymakers, and everyday citizens alike, this confirmation underscores the deepening challenges facing the domestic market.
Despite the pessimistic readings for the third quarter, the survey does harbor modest expectations for a late-year bounce. Analysts are projecting a tentative economic recovery for the final quarter of 2026, penciling in an estimated 1.8% growth rate. This figure marks a modest 0.5 percentage point increase compared to the previous survey, which had anticipated a 1.3% expansion in the fourth quarter.
Even with this anticipated year-end rebound, it was not enough to prevent a broader downward revision for the annual economic ledger. When the August REM was compiled, estimated growth for the entirety of 2026 stood at a year-on-year expansion of 2.1%. The latest September update curtails that annual expectation down to 1.5%, reflecting a more cautious overarching outlook among forecasters.
A primary driver behind this persistent downward correction is the sluggish performance plaguing key sectors of the real economy. Traditional pillars such as manufacturing industry, commerce, and construction continue to face steep headwinds. Crucially, the economic contraction within these domestic-facing sectors is currently failing to be fully offset by the ongoing export boom seen in primary industries like mining, energy, and agriculture.
Among the domestic sectors bearing the brunt of the downturn, manufacturing stands out as one of the hardest hit. Following a severe 5% month-on-month seasonally adjusted drop recorded in July—which marked the sharpest single-month decline since March 2025—subsequent data has offered only marginal and incomplete relief. While a report released on a Wednesday showed a 1.9% rise in manufacturing output during August, market observers noted that the improvement is far too weak to recoup the heavy losses sustained just a month prior.
When measured against the baseline figures recorded in December 2025, industrial manufacturing is down by 1.6%. Looking across a broader timeline, output has plummeted by more than 7% since the inauguration and the subsequent implementation of sweeping economic reforms under President Javier Milei.
Exchange Rate, Unemployment, and Inflation Projections
Beyond the shifting GDP figures and the struggles of the manufacturing sector, expectations surrounding the domestic labor market have also deteriorated notably when compared to the previous survey round.
Financial analysts participating in the Central Bank poll estimated that the national unemployment rate will climb to 7.5% during the third quarter of 2026. This projection sits 0.2 percentage points higher than the measurements recorded in the prior survey. Looking further ahead to the final three months of the year, the outlook darkens slightly further, with projected unemployment expected to tick up to 7.7% for the fourth quarter.
On the pricing front, inflation continues to command close attention from both market participants and monetary authorities. Forecasters adjusted their monthly projections upward, estimating a 1.9% inflation rate for September. This represents a slight acceleration compared to the previous month’s survey, which had anticipated a 1.8% monthly rise. Furthermore, analysts project that the annual inflation figure will close out the year at 30%. This represents an upward adjustment from August projections, which had placed annual inflation expectations at a slightly more moderate 27.7%.
Amid the general wave of upward adjustments for inflation and unemployment, and downward revisions for economic growth, exchange rate projections emerged as the sole indicator showing a relative improvement from the perspective of market stability.
According to the survey responses, the official exchange rate for the end of October is expected to settle at approximately 1,545 Argentine pesos per U.S. dollar. This anticipated level sits about 20 pesos below the projections captured in the previous survey. Looking further down the road to the close of the calendar year, the December exchange rate is projected to reach approximately 1,614 pesos per U.S. dollar. This year-end projection equates to an anticipated 11.5% year-on-year increase in the nominal exchange rate, signaling a continuation of a controlled depreciation path managed by monetary authorities.
