Argentina’s Economy Surges 6.1% in First Quarter as Recovery Takes Hold

Argentina’s economy expanded by 6.1% in the first quarter of 2025, according to data released Wednesday by the National Institute of Statistics and Census (INDEC).

This growth marks a significant turnaround after the country endured economic contractions of 1.7% in 2024 and 1.6% in 2023. March showed a 5.6% year-on-year increase in economic activity, though it declined 1.8% from February.

This represents the first monthly contraction since April 2024 after ten consecutive months of growth. Financial intermediation led the sectoral growth with a remarkable 29.3% increase compared to March 2024.

Construction grew by 9.9%, while trade expanded by 9.3%. Agriculture and related sectors rose by 6%, mining activity increased by 5.7%, and manufacturing expanded by 4.2%.

Not all sectors shared in the prosperity. Utilities including electricity, gas, and water services fell by 4.3%. The hospitality industry also struggled with a 3.6% decline in the same period.

The economic rebound follows President Javier Milei‘s aggressive fiscal and monetary adjustment program implemented after taking office in December 2023.

His administration has prioritized fiscal discipline, achieving the country’s first budget surplus in years while reducing inflation from 211% in 2023 to a projected 30% by the end of 2025.

Argentina’s Economic Recovery Accelerates with IMF Support

The International Monetary Fund approved a new Extended Fund Facility for Argentina in April, providing access to $20 billion with an immediate $12 billion disbursement. This agreement enabled Argentina to lift exchange rate controls that had been in place since 2019.

Economic analysts now project growth between 4% and 5.5% for 2025, driven by energy, mining, agriculture, and other sectors linked to natural resources. The recovery has happened faster than expected due to fiscal consolidation, real income recovery, and credit growth.

Public spending has decreased from approximately 38% of GDP to an expected 32% in 2025, reflecting the government’s austerity measures. The administration continues to focus on expanding the economy without resorting to monetary emission, a key pillar of Milei’s economic strategy.

The government views these positive economic indicators as validation of its reform agenda ahead of legislative elections in October 2025, when Milei will seek to strengthen his parliamentary influence.