BUENOS AIRES (Reuters) – Argentina’s economy is expected to have contracted 2.6% in the third quarter of 2024 versus a year earlier, the sixth straight such decline, but expanded against the quarter before, breaking a technical recession going back to the end of last year.

A Reuters poll on Thursday, involving 13 local and foreign analysts, gave the year-on-year contraction of gross domestic product (GDP), which follows a 1.7% contraction in the second quarter and a steep 5.1% drop in the first quarter.

Economic activity, an early barometer of growth, slid 3.3% year-on-year in September, 3.7% in August and 1% in July, data from the INDEC statistics agency show, as industry slowed amid a harsh austerity drive by libertarian President Javier Milei.

Milei’s administration has slashed social spending and launched mass public sector layoffs, and one of the world’s highest annual inflation rates has come down to 166%. But the economy has slowed and poverty rates have surged past 50%.

The government has gained plaudits for stabilizing the state’s finances after years of overspending, which has boosted markets. But getting the economy going will be the acid test for Milei’s reforms and his still robust popularity rating.

Eugenio Mari, chief economist at Fundacion Libertad y Progreso, said he expected the economy to grow some 3% from the previous quarter, which would break three consecutive quarter-on-quarter declines that marked a technical recession.

“Let’s hope this trend consolidates in 2025,” Mari said.

The government predicted in its draft budget that GDP should grow by 5% next year.

INDEC is set to release third-quarter GDP data on Monday.