Exports boom but households struggle as INDEC posts 2.3% growth

Argentina's economy grew 2.3 percent year-on-year in the first quarter of 2026, driven largely by exports, though there are signs of strain for citizens making themselves known.

Figures released by the INDEC national statistics bureau Tuesday confirmed that gross domestic product (GDP) also rose 0.7 percent on a seasonally adjusted basis compared with the fourth quarter of 2025.

Agriculture, fishing, mining and financial intermediation drove growth in the first three months of the year, while manufacturing (slumping 1.7 percent) and retail trade (falling 0.3 percent) were the hardest-hit sectors.

INDEC’s data also shows that purchasing power has fallen and that employment is showing signs of strain.

Economy Minister Luis Caputo celebrated the figures on X, pointing to rising exports and what he called a "historic high" in private consumption (up 2.7 percent).

Speaking at an event hosted by the Fundaciön Faro libertarian think tank Tuesday night, President Javier Milei was more combative.

"One of the things journalists and 'serious analysts' were saying was that the economy was sunk in a great depression and consumption had been destroyed. They talked about stagflation. But today all those lies have collapsed," he declared.

The media is “ determined to present the figures in the worst possible light,” added the President.

Milei launched a severe austerity programme in late 2023 that ended Argentina's chronic fiscal deficit and brought triple-digit inflation down to an annual rate of 31.5 percent two years later.

The economy grew 4.4 percent in 2025 and is expected to improve three percent this year.

Economists, however, caution against an overly rosy reading of the data. Andrés Asiaín, director of the Centro Scalabrini Ortiz, argues that the rise in consumption "has to do with the change in relative prices," in particular the impact of rising service costs and the higher household expenditure that entails.

"What the figure partly reflects is the composition of spending, which relates to a model that is redistributing income in a very unequal way," he told the AFP news agency.

Guido Zack, economics director at Fundar, noted that private consumption includes purchases of imported goods and spending by Argentines abroad – items that do not necessarily stimulate local businesses. The figure "can grow and that doesn't necessarily translate into an improvement in people's living standards," he said

Two-track economy?

Milei’s government has introduced a sweeping investment incentive scheme for major investors, offering 30-year tax and customs exemptions to attract large inflows of capital directed primarily at the mining and hydrocarbons sectors – two of the industries accounting for much of the country's economic growth.

But the economy appears to be moving in two directions: while those sectors surge, industry and commerce are sinking.

"The sectors that are growing, such as mining, are not hiring people and their activity depends more on exports. Those that are falling employ more people and sell to the local market," said Florencia Fiorentin, chief economist at the Epyca Consultores firm.

The number of households defaulting with banks has reached a two-decade high, according to Argentina's Central Bank. The deterioration has accelerated sharply over the past year: the default rate stood at 3.7 percent in April 2025 before climbing to 12.1 percent a year later.

State-owned banks have since launched rescue schemes to address the backlog of unpaid debts.

Unemployment rose to 7.8 percent in the first quarter of 2026, up from 5.7 percent when Milei took office in December 2023.

Informal employment also increased, reaching 44 percent as of April, INDEC reported Monday.

– TIMES/PERFIL/NA/AFP