Argentina’s economy kicked off the year with solid growth, posting a 6.5% year-on-year expansion in January 2025, according to the Monthly Economic Activity Estimator (EMAE) recently published by INDEC.
This figure far exceeded initial market expectations of 4.7% growth, supporting a clear recovery trend and marking the strongest increase since May 2022.
Among the most dynamic sectors, financial services stood out, with a notable 25.7% increase, up significantly from 16.9% in December.
This boost reflects a healthy recovery in domestic credit and stronger financial intermediation—key drivers of household consumption.
Likewise, key sectors such as construction, which rebounded from a 7.2% contraction in December to a positive 1.9% growth, and utilities, which accelerated to 6.6% from 2.8%, underscore stronger infrastructure investment and the gradual recovery of domestic demand.
However, not all sectors are following this positive trend. Fishing, along with hotels and restaurants, remains weak, suggesting that the economic recovery remains uneven and continues to face structural imbalances that could persist in the coming quarters.
Meanwhile, Argentina’s current account balance saw a major turnaround in Q4 2024, reaching a surplus of USD 1.03 billion. This result stands in sharp contrast to the USD 2.67 billion deficit recorded in the same period the previous year, signaling a clear improvement in the country’s external accounts.
The recovery of the surplus was mainly driven by a significant positive balance in goods, which rose to USD 4.88 billion, thanks to an increase in export volumes. However, the persistent deficit in services, which widened to USD 1.61 billion, partially offsets the positive trade impact on the overall figures.
This more favorable economic backdrop opens a window of opportunity for Argentina, especially considering the possibility of reaching a renewed agreement with the International Monetary Fund (IMF). A potential deal could bring greater economic and financial stability and create favorable conditions for long-delayed structural reforms.
In summary, recent data show encouraging signs in Argentina’s economy, though major challenges remain. Solid economic growth, improvement in the external sector, and the potential stabilization linked to an IMF deal shape an optimistic yet cautious outlook. It will be crucial to monitor how lagging sectors evolve and whether the current positive momentum can be sustained and expanded through the rest of the year.
