Argentina’s central bank said Thursday it expects a “significant” rise in output in the last quarter of the year after a third-quarter decline, and that inflation should keep falling despite three price pressures.
In its quarterly monetary policy report, the bank said output fell in the third quarter mainly because of temporary shocks: farm activity returning to normal after record harvests, gas cuts to factories during the cold weather, and heavy rain and snow in some regions. It expects a rebound once farm activity normalizes and those shocks fade, but warned that monthly figures for November could be distorted by working days lost to holidays for Pope Leo XIV’s visit, from November 8 to 11. The bank gives no figure for the fourth-quarter rise.
Analysts the bank surveys expect output to fall 1.0% in the third quarter and grow 1.8% in the fourth, each compared with the previous quarter and adjusted for seasonal swings. The report ties the earlier slowdown, a 0.6% drop in the second quarter, to higher inflation abroad, slower growth in Argentina’s main trading partners and tighter foreign financing.
Inflation averaged 1.9% a month in the third quarter, 0.3 points less than in the second, the report says, and the bank expects it to keep falling through year-end, helped by the stance of fiscal and monetary policy and less inertia in prices and wages. It names three items that could push prices up temporarily: beef, which usually rises sharply in November and December, though by less than a year ago; gas tariffs, which are rising in October and November as the Cold Zone subsidy, a discount for homes in colder regions, is cut; and gasoline, after pump prices rose in late September.
The bank bought US$3.4 billion from the market in the third quarter and more than US$15.8 billion so far this year, and says its purchases picked up again from October. Its international reserves rose about US$9.4 billion between January and October 26.
The report also devotes a section to the bank’s gold hedging, which the national audit office said earlier this month cost US$1.023 billion in 2025. The audit office counted the losses and premiums on the option contracts on their own, and its president said the bank would have gained a little over US$3.5 billion without them.
The bank treats the contracts and the rise in the price of gold as one strategy. It calls the 66% jump in gold in 2025 statistically extremely unlikely, and says the hedge still let it capture about 70% of the rise and produced what it calls an “unprecedented” gain on its gold position.