Argentina's Economic Data Points to Mixed Recovery as Milei and Experts Disagree

Lead

Argentina's economy is showing signs of recovery, but the picture is far from uniform. Officials point to a sharp rebound in March activity and a record trade surplus in April as evidence that President Javier Milei's reform agenda is paying off. Yet economists and private consultants caution that the recovery is uneven, driven largely by external factors, while domestic consumption and employment remain weak. The debate over whether the worst is truly behind Argentina has become central to the political and economic discourse.

Coverage Comparison

Reporting from the Buenos Aires Times presents a multi-faceted view of Argentina's economic situation, drawing on official statistics and private analyses. One set of reports highlights the positive surprises in March economic activity and the strength of the April trade balance. Another emphasizes the less encouraging trends, such as a seventh consecutive monthly decline in public consumption and a sharp contraction in February. The coverage also includes the government's optimistic narrative, echoed by Economy Minister Luis Caputo, who insists the underlying trend is positive and even predicts a landslide re-election for Milei in 2027.

Meanwhile, other reports in the same outlet capture the skepticism from economists and private consultants, who argue that the recovery is largely export-led and not yet reflected in domestic demand or employment. This contrast underscores the challenge of interpreting mixed economic signals in a country long accustomed to volatility.

Key Claims

March Economic Rebound

According to data from the INDEC national statistics bureau, Argentina's economic activity grew 3.5 percent in March from February and 5.5 percent year-on-year, far exceeding the expectations of analysts surveyed by Bloomberg, who had forecast a 0.8 percent monthly increase and a 2.1 percent annual rise. Fourteen of the 15 sectors of the economy expanded compared to the same month a year earlier, with fishing leading the way at 30.9 percent annual growth, followed by agriculture (17.9 percent), mining (16.3 percent), and manufacturing (4.6 percent). Construction activity grew 4.7 percent from the previous month and 12.7 percent from a year earlier, while industrial production rose 3.2 percent and five percent, respectively.

President Milei celebrated the news on social media, writing that "activity is flying!"

February Contraction

The rebound came after a sharp contraction in February, when economic activity fell 2.7 percent month-on-month, the biggest slump since 2023, as retail and manufacturing continued to struggle. Economy Minister Luis Caputo attributed the February decline to the month having two fewer working days than the same period in 2025 and to a general strike, arguing that the underlying trend remained positive.

Trade Surplus and Energy Exports

Argentina's trade balance posted a US$2.711-billion surplus in April, marking the 29th consecutive month in positive territory. The result was driven by a historic increase in exports and a decline in imports. Total trade exchange reached US$15.118 billion, up 15.1 percent year-on-year. Exports totalled US$8.914 billion, a 33.6-percent annual increase, supported by a 20.6-percent jump in volumes and a 10.8-percent rise in prices. Energy exports grew almost 90 percent year-on-year, partly attributed to global demand and production in the Vaca Muerta shale region.

Inflation and Public Consumption

Monthly inflation slowed in April for the first time in 11 months, falling to 2.6 percent, led by higher fuel costs and education. However, public consumption fell 3.8 percent in April, the seventh consecutive monthly decline, and has not grown since October's midterm elections. Since Milei took office in December 2023, the number of formally employed people in Argentina has decreased by 205,000.

Government Optimism vs. Private Caution

President Milei's economic team is seeking to consolidate the narrative that "the worst is now behind us," pointing to improvements in sectors tied to the domestic market: non-alcoholic beverage sales rose 1.2 percent, cement shipments 5.5 percent, car licensing 2.3 percent, steel production 11.4 percent, and soybean crushing 21.4 percent. A government source told Perfil that the recovery has "solid bases" and that feedback between improvements creates a "virtuous circle."

Private consultants and firms ratify the rebound but flash amber lights as to its sustainability. The Eco Go consultancy's Estimador de Actividad Económica shows a 0.8 percent expansion in March against February and a 2.4 percent year-on-year rise, but notes that the exclusive driving force was the external market, where exports shot up 41.2 percent for the month, while sensitive consumer variables barely moved by 1.4 percent.

Caputo's 2027 Election Prediction

Economy Minister Luis Caputo said in an interview with Cadena 3 Argentina that President Milei "will win the 2027 election by a landslide in the first round." He stressed that the current government's economic policy is "not only different from Macri's – it is the opposite," arguing that Macri inherited a similar fiscal deficit but left it untouched during his first two years, whereas the Milei administration is correcting it. Caputo also claimed that "today you see euphoria about investing in the real economy" and "zero euphoria in finance," in contrast to the Macri era.

Perspectives

Government Viewpoint

President Milei and Economy Minister Caputo argue that the economy is recovering and that the worst has passed. They cite strong March activity, a record trade surplus, slowing inflation, and improvements in key sectors as evidence that the reform program, including aggressive fiscal adjustment and deregulation, is working. Caputo has expressed confidence in Milei's re-election and dismissed concerns about credibility, attributing historic pessimism to Argentina's economic past.

Economist and Consultant Viewpoint

Economists and private consultants, while acknowledging the rebound, caution that the recovery is not yet broadly based. They point to persistent weakness in domestic consumption, a seventh monthly decline in public consumption, and contraction in February to argue that the government may be painting an overly optimistic picture. Private statistics firms, which Milei has accused of focusing on the wrong areas or spinning data negatively, emphasize that the recovery is largely export-driven and may not be sustainable without improvements in the domestic economy.