Q3 GDP grew +0.6% q/q (+1.2% y/y), accelerating from +0.5% in Q2, driven by private consumption which grew +0.8% q/q and investment which grew +2% q/q. Public consumption contracted -0.4% q/q, along with exports
(-2.8%) due to subdued global trade and the Argentina recession. Yet, without the buildup in inventories which added +0.6pp to growth, the Q3 figure would have been close to zero. This could show two things: expectations of higher internal demand; a frontloading of imports (+2.9% q/q growth in Q3, highest pace in a year) as the currency lost ground against the USD. For 2020, we expect an acceleration of growth to around +2% on the back of the cyclical consumption recovery and a positive investment boost following the pension reform, helped by accommodative monetary policy and one-off stimulus measures in Q4. Yet, the sustainability of the momentum is at risk: First, the window of opportunity for reforms has narrowed as public sector reform was postponed to avoid stirring social protests, and municipal elections are scheduled for next fall. Second, companies could lose their bet on higher demand if the tax reform is delayed.