Key facts
- Consultancy Analytica forecast a further contraction of around 1.5% in the third quarter, after GDP fell 0.6% in the second quarter from the first.
- Think-tank Fundar estimated 32,300 businesses, roughly 6% of Argentine companies, closed between December 2023 and July.
- Market research firm Scentia said consumption fell 2.7% in the first nine months of the year compared with the same period in 2025.
- Argentina's INDEC statistics agency reported manufacturing fell 3.2% year-on-year in August, retail and wholesale trade dropped 3.5% and construction declined 2.5%.
- A government spokesperson said growth never occurs uniformly across sectors and the president would not change the economic program.
Argentina's economy likely contracted for a second consecutive quarter in the July-September period, meeting the common definition of a recession, economists said in a report published November 2. Official data for the quarter is due in November.
Ricardo Delgado, head of consultancy Analytica, said GDP already fell 0.6% in the second quarter from the first and forecast a further contraction of around 1.5% for the third quarter. He said household finances were unlikely to improve meaningfully before the October 2027 presidential election, when Milei is widely expected to run for a second term.
Household consumption accounts for about two-thirds of gross domestic product, so a sustained pullback in spending weighs on the wider economy. Market research firm Scentia, which tracks sales across supermarkets, small retailers and e-commerce platforms, said consumption fell 2.7% in the first nine months of the year compared with the same period in 2025.
Think-tank Fundar estimated that 32,300 businesses, roughly 6% of Argentine companies, closed between Milei taking power in December 2023 and July. At Eseka, a family-owned sock factory in Buenos Aires, sales have fallen around 40% since Milei took office, co-owner Ricardo Kuchikian said. The firm posted losses last year and shed about 30% of its workforce, according to the brothers, and over half its circular knitting machines stand idle.
Milei's austerity has slowed inflation to 30% from 200% and brought other macroeconomic imbalances under control, but the share of Argentines below the poverty line has risen to nearly a third of the population after falling to an eight-year low in 2025. A survey by consultancy Giacobbe y Asociados put Milei's approval rating at 36% in October, with disapproval at 56%.
Energy, mining and agriculture have gained under Milei's model on exports and investment in shale oil and gas reserves and demand for lithium, but the report said that strength has not offset slumps in textiles, auto manufacturing, retail and construction. INDEC data for August showed manufacturing fell 3.2% year-on-year, retail and wholesale trade dropped 3.5% and construction declined 2.5%.
A government spokesperson defended the uneven pace of the recovery, saying growth never occurs uniformly across sectors. "This is the economic program the president believes in, and he is not going to change it," the spokesperson said. Milei has ruled out changes to his plan, dismissing as "colossal stupidity" claims that people were unable to make ends meet.