Recession almost assured: the alarming data that shook the economy

The Argentine economy has once again turned on the red flag. According to a report from the Torcuato Di Tella University (UTDT) , the probability of the country abandoning its expansionary phase and falling into recession in the coming months soared to 98.61% in August , amid growing financial and political tensions .

The figure represents a jump of more than 42 percentage points compared to July, when the probability stood at 56.16% . This is also the highest level since 2018 , reflecting the magnitude of the deterioration in economic activity indicators.

The study is part of the monthly monitoring of the Leading Index (IL) , a tool designed to anticipate changes in the economic cycle . This index is compiled from ten statistical series that allow for the detection of turning points in the Monthly Estimator of Economic Activity (EMAE) .

The data that make up the indicator include the General Stock Exchange Index (IGBC) , the Merval Argentina , the monetary aggregate M1 , the FOB price of soybeans , car sales to dealers , VAT collection , cement dispatch , the Consumer Confidence Index (ICC) , in addition to industrial references such as the production of non-metallic minerals and steel .

In August, the Leading Index registered a 4.72% drop in its seasonally adjusted version and a 1.22% decrease in the trend-cycle series. However, in year-on-year terms, the LI showed slight growth: 0.20% compared to August 2024 in the seasonally adjusted series and 2.42% in the trend-cycle series.

UTDT specialists interpret these variations as warning signs of macroeconomic fragility, where political uncertainty and market volatility play a key role. This data confirms the growing perception that the Argentine economy is facing a critical situation in the run-up to the national elections.