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On Monday, JPMorgan warned that Argentina’s economy is heading toward recession and said the Argentine economy had its worst performance in July since 2020.

The U.S. bank cut its forecast for Argentine GDP growth in 2026 from 2.7% to 1.5%, representing a major setback for far-right President Javier Milei, who promised macroeconomic stabilization.

The Monthly Economic Activity Estimator (EMAE) recorded a 1.4% year-over-year decline in July, driven by severe sectoral drops such as industrial activity (-4.6%) and commercial activity (-5.1%).

“We expected weak activity data in July, in line with the context of weakness that characterized the second quarter. However, the reported contraction far exceeded our forecast of approximately -1% month over month,” JPMorgan said.