Argentina Economy Grows 6.1% in Early 2025 Amid Sector Gains

Argentina's economy showed significant recovery in early 2025, with a 6.1% growth in the first five months and a 5% year-on-year expansion in May, though growth slowed compared to previous months. Key sectors such as financial services and fishing led the expansion, growing notably by 25.8% and 12.2% respectively, while utilities and the public sector continued to contract. The government, led by President Javier Milei, implemented austerity measures including spending cuts, regulatory rollbacks, and a floating currency regime, which helped stabilize inflation—dropping from over 200% in 2024 to below 40% by June—and attracted foreign investment. Despite the overall positive trends, economic activity fell 0.1% month-to-month in May, reflecting ongoing challenges such as weaker growth in agriculture, manufacturing, construction, and trade, as well as pressures from unemployment and wage declines. The poverty rate improved to approximately 31.7%, signaling social benefits from the economic rebound, but sustaining growth and further inflation reduction will require continued policy discipline. Analysts remain cautious as Argentina's economy seeks to avoid past cycles of instability amid uneven sectoral recovery.