BUENOS AIRES, Oct 22 Reuters Argentina39;s beleaguered economy is set to rebound in 2025 after two years of recession as the government tries to spark a private sectordriven recovery with its chainsaw plan to shrink the size of the state, a Reuters poll showed.

Household spending is expected to pick up thanks to a fall in inflation induced by President Javier Milei39;s austerity steps. At the same time, exports and investment are likely to rebound as a web of regulation is unwound.

Gross domestic product will probably increase 3.5 next year following an estimated contraction of 3.7 in 2024 and a 1.6 drop in 2023, according to median estimates of 28 economists polled Oct. 1418.

We expect the economy to begin to expand sequentially in the last quarter of the year and to keep doing so in 2025 led by a recomposition of private consumption, with stable public spending, said Juan Barboza, head of research at Grupo Mariva.

Energy sector output, which is already starting to take off, will continue rising and substituting imports while activity in the service and manufacturing industries normalizes, he added.

In the poll, average inflation is seen collapsing to 53 next year from a dizzying 222 clip in 2024, a surge initially fed by a large devaluation of the peso at the end of last year aimed at correcting an artificially strong exchange rate.

Energy investments could reach up to 15 billion in 2025 and 16.5 billion in 2026, due in part to a deregulation push that should…