Argentina’s Economy Loses Speed as Talk of US Financial Assistance Returns
ARGENTINA · MARKETS
Key Facts
- —The country Argentina, South America’s second-largest economy, has slashed inflation under libertarian President Javier Milei, but its growth is now fading.
- —The background In October 2025 the US Treasury bought pesos and offered Argentina’s central bank a US$20 billion currency swap to steady the currency.
- —Why now Official data show activity fell 2.9 percent in July, and the premium investors demand on Argentine bonds hit its 2026 high on Friday.
- —What happened In an Axios interview published on Saturday 3 October, US Treasury Secretary Scott Bessent said Washington could repeat that support: “Sure.”
- —The numbers Country risk closed at 655 points on 2 October, reserves stood at US$48.65 billion, and August inflation was 1.7 percent.
- —What it means for you Any new US financial assistance would mainly calm the peso and bonds; it would not revive weak shop sales or factory output.
- —Still open Bessent named no amount, timing or conditions. Official August activity data follow on Wednesday 21 October.
Argentina’s economy is losing speed, and Washington has signalled that fresh US financial assistance remains possible. In an Axios interview published on Saturday 3 October, US Treasury Secretary Scott Bessent said the US could do it again.
He announced no new operation and named no amount, so the remark is a signal rather than a rescue. It lands as activity slides, savers keep buying dollars and Argentina’s borrowing costs sit at their 2026 high.
What Bessent Said About Argentina
Bessent spoke to Mike Allen on The Axios Show, filmed at the US Treasury building in Washington. Bloomberg reported his Argentina remarks on Saturday.
“I would submit that the stabilization of Argentina has led to a sea change in Latin America,” he said. He then asked whether the US could do that again, and answered: “Sure.”
Argentine media ran the comment widely on Sunday 4 October as an open door to new US financial assistance. The national news agency Noticias Argentinas noted that Bessent announced no new operation and set out no conditions.
According to MDZ, a news site based in Mendoza, he also called Milei a great ally of the United States. He repeated his view that economic security is national security.
What the US Did for Argentina in 2025
In October 2025, weeks before Argentina’s midterm elections, the US Treasury bought pesos and offered a US$20 billion swap line. A swap lets a central bank borrow dollars against its own currency for a set period.
Argentina’s central bank used only part of it: a Treasury report put the amount traded at US$2.5 billion. In January 2026 Bessent said Argentina had “quickly and fully repaid its limited draw”, Fortune reported.
He described the deal as making “tens of millions” in profit for Americans. His remark points to that tested form of US financial assistance, not a new plan with a figure or deadline.
Why Argentina’s Economy Is Losing Speed
INDEC, Argentina’s national statistics institute, reported on 24 September that activity fell 2.9 percent in July from June, after seasonal adjustment. INDEC’s own series shows no steeper monthly drop since the pandemic lockdown of April 2020.
Activity was also 1.4 percent below July 2025, the first year-on-year fall since February. The adjusted index now sits about 4.5 percent below this year’s March peak and at its lowest level since March 2025.
The second quarter was already weak: gross domestic product shrank 0.6 percent from the first, INDEC said on 17 September. Private consumption fell 2.4 percent, while exports rose 2.5 percent.
Economists call two straight quarters of contraction a technical recession. If July to September also shrinks, Argentina meets that definition; INDEC publishes the figure on Wednesday 16 December.
Two Economies Moving in Opposite Directions
The July data show a split economy. Mining and quarrying grew 8.4 percent from a year earlier, while commerce fell 5.1 percent and manufacturing 4.6 percent.
Economist Alfredo Zaiat, writing in the opposition-leaning news site El Destape, rejects the official “two-speed” description. In his reading, export sectors such as mining, oil and farming grow while the domestic economy shrinks.
Economy Minister Luis Caputo rejects the recession label. In a Clarín interview published on Saturday 3 October, he said Argentina is “growing less than before”, not shrinking.
He points to a smoothed INDEC series that still rises 0.2 percent a month. Wall Street is less relaxed: JP Morgan cut its 2026 growth forecast to 1.5 percent on 25 September, from 2.7 percent.
Dollar Demand and a Rising Risk Premium
Since currency controls ended in April 2025, individuals have bought US$47.3 billion, central bank data cited by Infobae show. Net of their sales, the figure is about US$40.3 billion.
In August alone, individuals bought US$2.85 billion. Those purchases compete with the central bank for the dollars exporters sell, which slows the rebuilding of reserves.
The risk premium is climbing as well. Country risk, JP Morgan’s gauge of the extra yield on Argentine dollar bonds over US Treasuries, closed at 655 points on Friday.
That equals 6.55 percentage points and is the highest level of 2026, Perfil reported, up from about 400 in July. The index rose 19 points on Friday 2 October alone, according to El Cronista.
Caputo has blamed half of the rise on global markets and half on fear of a return to past policies. Analyst Nicolás Parreira of Grupo Sigma argued in Perfil that global factors cannot explain it alone, since other regional bonds were punished less.
What Is Holding Argentina Up
The peso has stayed calm. The wholesale rate closed at 1,520 pesos per US dollar on Friday, BAE Negocios reported, slightly stronger on the week.
That is well below the 1,921.49 ceiling of the official trading band, the range in which the peso may float. The central bank also bought US$35 million on Friday.
Gross reserves reached US$48.65 billion on 2 October, El Esquiú reported. Purchases this year exceed US$14.5 billion, above the US$10 billion goal agreed with the International Monetary Fund (weekly buying, 3 October).
Inflation, Milei’s main achievement, keeps easing. Consumer prices rose 1.7 percent in August, INDEC said, though they were still 33.5 percent higher than a year earlier.
Investment plans are also arriving. At the government’s Argentina Week in Paris, companies announced about US$27 billion of projects, mostly in energy and mining, Perfil reported.
What New US Help Would and Would Not Mean
Fresh US financial assistance would act as a backstop for the peso and reserves, the role the 2025 swap played. It would not, on its own, lift wages, shop sales or factory orders.
Nothing is agreed. Bessent’s remark contained no amount, timing or trigger, and no new programme has been announced in Washington or Buenos Aires.
Talk of US financial assistance may still reassure bond investors that Argentina has a powerful backer. Whether they read it that way will show in bond prices this week.
What Comes Next
INDEC’s release calendar puts August industry and construction data on Wednesday 7 October and September inflation on Tuesday 13 October. The August activity index follows on Wednesday 21 October.
Investors will watch country risk, savers’ dollar purchases and any formal offer of US financial assistance. Until then, Argentina’s cushions are its own: reserves, central bank dollar buying and slowing inflation.
Bessent’s words do not mean a rescue is under way. July’s fall alone does not mean an official recession either; the December figure decides that.
More: Latin America news in English, every day from The Rio Times.
Is the US giving Argentina new money?
Not at this stage. Bessent said the US could repeat its 2025 support, but he named no amount, timing or conditions. No new US financial assistance programme has been announced.
Is Argentina in recession?
Not officially. Gross domestic product fell 0.6 percent in the second quarter, and a second quarterly fall would mark a technical recession. INDEC publishes third-quarter data on Wednesday 16 December.
What was the 2025 US financial assistance to Argentina?
The US Treasury bought pesos and offered a US$20 billion currency swap in October 2025. Argentina traded about US$2.5 billion through it, and Bessent said in January 2026 that it had been fully repaid.
What does a country risk of 655 points mean?
Investors demand 6.55 percentage points more yield on Argentine dollar bonds than on US Treasuries. A higher number means costlier borrowing for the government and for companies.
Sources: Bloomberg (via Yahoo Finance), 3 October 2026; Axios, 3 October 2026; Noticias Argentinas, 4 October 2026; MDZ, 4 October 2026; Fortune, 9 January 2026; INDEC, EMAE July 2026, 24 September 2026; INDEC, GDP second quarter 2026, 17 September 2026; INDEC, CPI August 2026, 10 September 2026; El Destape, 4 October 2026; Infobae, 28 September 2026; Perfil, 2 October 2026; El Cronista, 2 October 2026; BAE Negocios, 2 October 2026; El Esquiú, 3 October 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
In depth
LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.