The economic recovery begins to be felt in the consumption, investment, wages, and dairy beat the rhythm of the first half 2025
The first quarter of 2025 showed a clear sign of recovery for the argentine economy. According to the INDEC, the GDP grew by 5.8 % year-on-year, contrasting with the deep fall in the same period of 2024. This growth, although encouraging, it reflects a phenomenon typical of post-crisis: a high dispersion sectorwhere some engines of the economy are re-spun with the force, while others are still showing remnants.
Among the sectors that led to this bounce highlights Gross Fixed Capital formation (GFFC that measures the investment in physical assets that are used by companies to expand or renovate their productive capacity), with an increase of 31,8 % year-on-year, driven by investment in machinery and equipment (+48.9 per cent) and transport (+74,7 %).
The private consumption, the main component of domestic demand, advanced a 11,6 %, recovering after the sharp contraction of 2024. However, the recovery was not uniform: while sectors linked to the investment and domestic consumption showed dynamism, others such as public consumption and personal services maintained a more moderate growth or even negative. This heterogeneity in sectoral it raises questions about the sustainability of growth in the coming quarters.
Inflation in decline and wages on the rise
The macroeconomic context accompanied this bounce. Inflation, after several months of slowdown, closed June in 39.4 per cent year-on-year, consolidating the downward trend observed since April (47,3 %) and may (43,5 %). According to the INDEC, the CPI increased 1.6 % monthly in June, accumulating a rise in the 15 % in the first half. In parallel, the nominal wage average showed a rise in 58,9 % year-on-year to April, which involved a real recovery of purchasing power around the 15-20 % considering the cumulative inflation up to half of the year. This advance in the real wage was a key to explain the rebound in private consumption, especially in essential goods.
The consumption of dairy products: a thermometer pocket
A fact highlighted within this context was the behavior of the consumption of dairy products. According to the Observatory of the Dairy Chain to Argentina (OCLA), the apparent consumption of dairy products grew by 14.5% year-on-year in the January–may period 2025. This expansion aligns with the improvement in the purchasing power and reinforces the idea that, in addition to the bounce statistic of GDP, there is a recovery tangible in the consumption habits of households. The evolution of the consumption of dairy products —an essential good and low degree of substitution— acts as a indicator advance of the relief in the economy of the families.
How to a rebound effect or the start of a virtuous cycle?
While these data are positive, analysts agree that a good part of the improved answers the call “rebound effect”after a strong year of recession. The challenge ahead will be to consolidate this growth through a stable macroeconomic environment, with controlled inflation, incentive policies to investment and employment generation. In that sense, the evolution of the domestic consumption —with the basket and the products such as dairy products as protagonists— will be key to measure the depth and sustainability of this recovery.
Projection July–December 2025: what to expect?
Inflation : The private screenings and officials expect the inflation remain around 1-2 % monthly for the rest of the year. This would lead to the inflation year-on-year in December 2025 to a range of 35-38 %, consolidating the trend as long as they remain in the control of the fiscal and foreign exchange.
Salaries; If the peer-to-peer accompany the evolution of prices, it is expected that the nominal wages to build up to a growth rate of 80-85 % year-on-year to Decemberwith a real improvement that could stabilize around the +10 % on December 2024.
Gross Domestic product (GDP); The statistical effect of the bounce will moderate in the second half of the year, and the estimates of private project that the GDP close by 2025, with a cumulative growth of 4-5 %with a slight slowdown in quarterly in the second part of the year.
Consumption of dairy products; If you hold the purchasing power and low inflation, the apparent consumption of dairy products could close in 2025, with a cumulative increase of 12-14 % over 2024.
We have an open scenario, but with encouraging signs
Current trends —controlled inflation, wages adjusting in real terms, and domestic consumption-dynamic—, argentina's economy would close in 2025 with an annual inflation around the 35-38 %, wages growing at the >70 % nominal annual and a GDP moving between the 4 and 5 %. In this context, the consumption of dairy projected an annual growth rate of accumulated 12-14 %, consolidating its role as an indicator of household welfare.
The challenge will be to sustain this scenario without shocks foreign exchange or any other tax, which would consolidate a cycle of sustained recovery.
