Argentina’s Economic Recovery: A Sectoral Divide

At the start of 2026, Argentina’s economic recovery is unfolding unevenly across its various sectors. While agriculture, mining, and finance demonstrate positive momentum, industry and construction continue to struggle, and trade remains stagnant. This complex landscape is characterized by mixed economic indicators and ongoing debate regarding potential stagnation scenarios amidst persistent high inflation.

Uneven Sectoral Performance

Analysis from EcoGo identifies three distinct groups of sectors. Financial intermediation (banking), energy, and agriculture are currently the most favored, experiencing growth and stability. Conversely, construction and industry have recorded the steepest declines, although some indicators suggest a partial recovery. Trade, alongside business activities, transportation, and communications, remain in a state of stagnation.

Key Indicators and Trends

Leading indicators compiled by Econviews, evaluating 28 variables up to February, reveal a mixed picture. Significant improvements are evident in the agricultural sector and mining. Specifically, liquidations of agricultural products and soybean milling increased by 21% compared to the previous quarter, while steel production rose by 12%, mineral extraction by 8.4%, motorcycle patenting by 7.5%, car sales by 6.9%, and cement consumption by 6.7%. More modest increases were observed in flour production (4.6%), general exports (3.8%), industrial production (3.1%), electricity consumption (2.8%), oil production (2.4%), and commercial loans (1.7%).

Industry Struggles and Challenges

Despite these overall increases, the manufacturing industry is still attempting to recover from losses incurred over the past two years. According to LCG, factory production remains 2.8% below November 2023 levels. While the industry saw a 3.1% monthly growth in January, preliminary data indicates a weakening trend, with automotive production falling by 25.4% month-over-month due to low domestic demand and increased competition from imported goods. The industry is also experiencing closures and workforce reductions, exacerbated by greater openness to imports.

Stagnation and Moderate Variations

Several sectors exhibit slight negative variations, stagnation, or very moderate growth. The Construya index of sectoral activity increased by 1%, while loans in pesos and construction activity each rose by 0.9%. Gas production and gasoline sales saw increases of 0.9% and 0.5%, respectively. Chicken production increased marginally (0.3%), and VAT collection remained unchanged. Formal private employment decreased by 0.5%, and social security contributions fell by 1.8%.

Significant Declines and Global Uncertainty

The most substantial declines were observed in property deeds in the City of Buenos Aires (-16.7%), potentially linked to reduced mortgage loan availability, and general imports (-10.5%), reflecting the overall level of economic activity. Construction currently operates with a 20% gap compared to the change of government in 2023.

Qualy, which monitors sector-by-sector performance, describes the situation as a “real economy in transition” towards a model with “dynamics of divergent speeds.” Anastasia Daicich, Qualy’s director, noted that the recovery of sectors will largely depend on two weak variables: real wages and credit, with limited prospects for substantial improvement in the short term. She added that global uncertainty, particularly the ongoing war conflict, continues to impact the domestic economy, with the extent of the impact varying based on the conflict’s duration and commodity prices, such as oil and soybeans.

Looking Ahead

Luciano Villegas, an economist at the Libertad Foundation, stated that the Argentine economy has begun a recovery process, but this rebound remains uneven across sectors. He emphasized that the political challenge moving forward will be to establish stable macroeconomic rules that extend this dynamism from specific activities to the more employment-intensive productive network.

Argentina’s agricultural sector, a major global food exporter accounting for 15.7% of the country’s GDP and 10.6% of tax revenues in 2021 World Bank, is crucial for the nation’s economic sustainability. Supporting family farming, developing a stable regulatory framework, and enhancing resilience through technological innovation are key areas for boosting recovery and promoting sustainability. Argentina.gob.ar works to strengthen and increase agro-industrial production throughout the country.