Supermarket and Retail Sales Drop as Milei Reshapes Argentina’s Economy

Argentina ended 2024, the first year of Javier Milei’s presidency, with a 3.3% drop in supermarket sales in December compared to the same month in 2023, according to the National Institute of Statistics and Census (Indec).

While annual supermarket sales fell by 11% and retail sales dropped 15%, these figures reflect a broader story of rapid economic transformation driven by Milei’s bold reforms.

Milei’s administration inherited an economy grappling with hyperinflation, fiscal deficits, and stagnant growth. To stabilize the situation, his government implemented sweeping austerity measures, including cutting public spending by 30%, freezing public wages, and eliminating subsidies.

These policies reduced inflation from 211% annually in 2023 to just 2.4% monthly by the end of 2024. The GDP contraction of 1.8% for the year also outperformed earlier forecasts of a 3.6% decline.

Retail figures highlight uneven recovery patterns. December retail sales dropped 13.2% month-on-month in seasonally adjusted terms and fell 14.5% year-on-year when adjusted for inflation.

However, some sectors showed resilience. Industries like textiles and home goods recorded annual growth exceeding 100%, reflecting shifting consumer priorities amidst economic adjustments.

Argentina’s Economic Adjustments Under Milei’s Leadership

Milei’s fiscal discipline achieved Argentina’s first budget surplus in over a decade but came with trade-offs. Public works projects were paused, over 30,000 public sector jobs were cut, and poverty rates exceeded 52%.

Meanwhile, private sector players like e-commerce giant Mercado Libre capitalized on changing consumer habits, reporting strong revenue growth during promotional events.

Analysts point to contrasting consumption trends: luxury goods like high-end cars and international travel saw growth, while demand for essentials like meat and dairy declined.

These disparities underscore challenges in reviving broader consumer spending as wages remain stagnant and unemployment rises. Looking ahead, Milei’s reforms have laid a foundation for projected GDP growth of 5% in both 2025 and 2026, according to the IMF.

For investors and policymakers, Argentina’s rapid adjustments offer key insights into navigating economic stabilization amidst structural challenges.