Argentina’s Economic Struggles Reflect in Weakening Consumption

Argentina’s economic landscape continues to present challenges, as evidenced by a recent slowdown in consumer spending across various sectors. Data from January 2026 indicates a contraction in mass consumption, coupled with concerns over declining purchasing power and rising debt among households. While some sectors, like household appliances and motorcycles, showed resilience in 2025, the overall trend points to a fragile recovery and persistent economic headwinds.

Mass Consumption Declines

Mass consumption in Argentina registered a year-on-year drop of 1.1% in January, according to Scentia. This decline was even more pronounced compared to December, with a 7% decrease. Chain supermarkets experienced a significant downturn, falling 15.4%, while independent supermarkets saw a 12.5% reduction. Pharmacies, e-commerce, and wholesalers also contributed to the overall contraction, decreasing by 7.8%, 11%, and 14.6% respectively. Warehouses and kiosks offered a slight reprieve, increasing sales by 3.7%.

Sector-Specific Performance

Despite the general downturn, certain sectors demonstrated pockets of growth. Shopping malls experienced a 3.4% increase in sales in 2025, marking five consecutive months of improvement. Household appliance sales in quantities rose by 17.3% in 2025, driven by increased imports. Interest in televisions (+54%), gas stoves (+3.1%), and small appliances (+2.8%) showed a recovery in February, according to the Econviews appliance index.

But, the automotive sector faced headwinds. Registrations of new cars fell 6% year-on-year in February, while used vehicle transfers decreased by 12.6%. Motorcycle sales, however, bucked the trend, rebounding by 30.9% year-on-year.

Real Estate and Construction Slowdown

The real estate sector also experienced a slowdown in early 2026. The number of real estate purchase and sale deeds in Buenos Aires fell 6.1% year-on-year in January, totaling 3,423 operations. Mortgage-backed purchases decreased by 19% compared to the same period in 2025, representing 22% of total transactions. Econviews noted a lack of applicants for long-term financing, a role previously filled by the AFJP.

Manufacturing and Wage Concerns

A recent survey by Indec revealed that over half of manufacturing companies are constrained by insufficient internal demand. Other challenges include labor costs, tax pressure, and financial difficulties. The weakness in consumption is linked to stagnant real wages and disposable income, which are 1.2% below November 2023 levels and 13.3% lower respectively.

Rising Household Debt

Alarmingly, a report by the Ra Center of the Faculty of Economic Sciences of the UBA indicates a growing trend of families accumulating debt to cover basic supermarket purchases. The irregularity ratio in loan payments reached 9.3% in December, tripling the level recorded in the same month of the previous year.

Expert Outlook

Economists express cautious optimism, emphasizing the need for wage improvements and government policies to stimulate demand. Pablo Moldovan of CP Consultora anticipates a scenario of stagnation in consumption throughout 2026, pending government salary policies. Osvaldo Del Río of Scentia highlights the critical role of purchasing power, noting that inflation continues to erode household incomes. Julian Fernandez of NielsenIQ estimates a modest growth of around 3% in consumption for 2026, insufficient to fully offset the decline experienced in 2024.

Del Río suggests that a new consumer base is emerging, and even with income growth, a rapid surge in mass consumption is unlikely. Instead, a gradual improvement in purchasing quality is expected.