The V-shaped recovery that the government was hoping for seems unlikely now, as some indicators suggest that the decline may have hit bottom in April. However, economists are adjusting their forecasts between a Nike swoosh-shaped recovery and a U-shaped one.
Economists predict that consumption will continue to weaken and activity will likely drop by around 4% for the year. The recovery is expected to be more U-shaped, similar to a Nike swoosh, lasting around 19 months on average. Historically, Argentine recessions last around 20 months, and the recovery process is expected to follow this trend.
Leading indicators for April are showing a slowdown in the decline in activity, but the recovery is expected to be gradual. There is no clear engine to drive a V-shaped growth, with investment unlikely to take off in the short term. The economy is moving at two speeds, with some sectors like mining, energy, and agriculture growing while others focused on the domestic market are struggling. Private salaries and pensions are expected to recover more than inflation, which could help boost private consumption. However, the increase in unemployment may continue to impact consumer spending.
Industry is one of the most affected sectors, and a recovery in activity is not expected to happen until inflation moderates. It may take until July or August to see signs of a recovery, with the possibility of a smile-shaped rebound that could last until May of next year.
