Argentina's economy shows rebound, but sector activity remains mixed

Argentina's economy demonstrated a notable rebound in March, with monthly economic activity (EMAE) rising 8% from the end-of-2023 level. This improvement occurred despite significant fiscal consolidation and restrictive monetary policies observed throughout much of 2025.

However, the recovery shows unevenness across sectors. Industrial production and construction, which had advanced in March, experienced setbacks in April. Over the past ten months, these sectors have fluctuated, with industry operating 2.5% below its late 2023 average and construction nearly 20% lower.

Discrepancies exist between monthly consumption indicators and national accounts data. One explanation suggests that informal workers, who have seen real income gains, may be increasing consumption through unticketed businesses, thus eluding standard measurement. This aligns with subdued dynamism in taxes linked to formal consumption.

Positive financial indicators, including negative real interest rates, currency stability, and reduced country risk, along with a lower inflation rate, are expected to bolster economic activity in the second half of the year. The trade balance has seen a substantial improvement, with the surplus growing significantly due to a 21% increase in exports, particularly in energy and agriculture, alongside contained imports.