Recession probability edges up to 82%
The estimated chance that Argentina's economy slips into recession stood at 82% in August 2026, according to the Leading Index compiled by the Center for Financial Research at Universidad Torcuato Di Tella. That was one percentage point above July's 81%, interrupting the decline recorded the previous month and holding the probability above 80%, a high level within the recent series. The measure expresses the likelihood that activity enters a contractionary phase in the coming months.[S1][S2][S3]
Di Tella builds the estimate from a set of economic and financial variables intended to anticipate turning points in the business cycle. Because the calculation starts from the value registered in the prior period, the probability does not shift abruptly and monthly movements tend to be gradual. The index is produced every month and seeks to run ahead of the activity path later captured by the Monthly Economic Activity Estimator, known as EMAE.[S1][S2][S3]
Leading Index and trend-cycle series both retreat
Beyond the higher recession risk, the Leading Index posted a negative reading in August. Its seasonally adjusted monthly version declined 0.27% from July to 122.45 points. Compared with a year earlier, the seasonally adjusted index sat 1.05% below its August 2025 level. The gauge draws on ten series and aims to identify direction changes in economic activity ahead of time.[S1][S2][S3]
The trend-cycle series, which smooths short-term swings, also moved lower. It reached 123.66 points, a monthly drop of 0.32%, and accumulated a 2.28% fall over twelve months against August of the previous year. To call a recession, the Leading Index requires the trend-cycle series of the EMAE to string together six consecutive monthly declines, the equivalent of two quarters of contraction. The drops in May and June do not yet meet that test, though they feed into the estimates for the months ahead.[S1][S2][S3]
Diffusion gauge falls to 30% as seven components stall
August's picture also appeared in the Diffusion Index, which tracks the share of Leading Index series showing significant improvements. It fell from 50% in July to 30% in August, meaning three of the ten components recorded positive variations. The series with favorable results were the M1 monetary aggregate, the official FOB price of soybeans and car sales to dealerships.[S1][S2][S3]
The remaining seven components showed no relevant gains during the month. Among them are stock market indices, value-added tax collection measured in real terms, cement shipments to the domestic market, the consumer confidence index and industrial production indicators. Those last measures include the readings from the Fundación de Investigaciones Económicas Latinoamericanas, or FIEL, for non-metallic minerals and steelmaking.[S1][S2][S3]
The official activity figure for July is due on September 24, and private forecasts point to a decline for that month. The most recent Indec statistic, covering June, had shown a monthly rise of 0.9% and a year-on-year gain of 2.7%. How the coming months unfold will be decisive in establishing whether the economy can reverse the negative signals seen in some of the forward-looking indicators.[S1][S2][S3]
