After years of economic turbulence marked by high inflation and recession, Argentina is entering a period of recovery.
Key indicators, including wages, employment, and poverty rates, show that the country is stabilizing under the economic reforms of President Javier Milei.
This shift marks a turning point in Argentina’s efforts to restore financial stability and improve living standards.
Argentina's economy has made a rapid recovery from its recent recession, driven by a significant rebound in real wages.
This resurgence has led to decreased poverty levels and increased purchasing power across the country.
According to El Economista, Argentina’s GDP has now returned to pre-crisis levels, while wages in both formal and informal sectors have surged past inflation.
The latest data shows that real wages in the private sector have fully recovered, even after the economic "shock therapy" implemented by President Javier Milei.
Over the last year, inflation dropped from 166% to 118%, allowing salaries to regain their purchasing power.
Wages increased by 159% overall, with the informal private sector leading at nearly 199%. Meanwhile, the unemployment rate fell from 7.7% to 6.9% within three quarters.
Sectoral Growth and Economic Stability
Argentina’s recovery is broad-based, with major growth in industries such as manufacturing, construction, and trade.
J.P. Morgan analysts highlight that real economic activity rose by 0.9% in November 2024, with annualized growth reaching 9.9% in the fourth quarter.
While activity remains slightly below the peak of June 2022, the economy has achieved a "V-shaped" recovery.
Employment creation and rising wages have reduced Argentina’s poverty rate, which dropped from nearly 55% in early 2024 to 38.9% by the year’s end.
Economist Daniel Fernández attributes the initial spike in poverty to wage erosion caused by runaway inflation. "Now that real wages are rising, poverty is falling sharply," he stated.
Outlook for 2025
Experts are optimistic about Argentina's economic trajectory in 2025.
With inflation moderating and credit growth accelerating, J.P. Morgan predicts a 5.5% increase in GDP for the year.
The financial sector is also benefiting from a reduction in interest rates, which fell by 300 basis points after inflation declined to 2.7% in December 2024.
Fernández notes that 2024 was the first year in a decade to see real wage growth. "This recovery, driven by employment and economic activity, is laying the foundation for sustained progress," he explained.
With continued investment and structural reforms, Argentina appears poised for a more stable and prosperous future.
