BUENOS AIRES, Sept 19, 2024 (BSS/AFP) - Argentina's economy contracted by 1.7 percent in the second quarter, the national statistics agency said Wednesday, deepening a recession in the austerity-hit nation.

It is the third consecutive quarter with gross domestic product (GDP) in the red, as President Javier Milei's government strives to reduce the country's budget deficit to zero.

Since taking office in December, Milei has applied a drastic austerity program in a bid to rein in chronic inflation and decades of government overspending.

He halted public works, eliminated state agencies, suspended financing to the provinces, fired tens of thousands of public employees and eliminated fuel and transport subsidies.

Monthly inflation has plummeted to the single digits, but analysts have warned this is a result of a massive economic slump as shoppers tighten purse strings.

Public consumption was down six percent year-on-year while private consumption plummeted almost 10 percent.

Annual inflation still stands at 236.7 percent.

The most notable year-on-year contractions were in the construction sector (-22.2 percent) and manufacturing (-17.4 percent).

The International Monetary Fund has worsened its outlook for Argentina's economy, which it now expects to contract by 3.5 percent this year, after a 1.6-percent decline in 2023.