Argentina’s economy grows 2.3% in Q1, lifted by agriculture, Vaca Muerta and mining

Argentina’s economy began 2026 in growth mode, though the recovery remained uneven and investment showed a sharp decline. Gross domestic product rose 2.3% in the first quarter from the same period last year and increased 0.7% from the fourth quarter of 2025 in seasonally adjusted terms, the national statistics agency INDEC said on Tuesday.

On the demand side, exports were the strongest-performing component, rising 9.8% year on year, although they fell 3.1% from the previous quarter, according to INDEC. Private consumption also increased, up 2.7%, but at a much slower pace than during much of 2025. Public consumption fell 0.9%.

INDEC said the improvement in consumption was driven largely by higher purchases of imported goods, especially final consumer goods and automobiles.

Sebastián Menescaldi, director of Eco Go, said the result was stronger than expected and pushed activity to record levels in seasonally adjusted terms. He cautioned, however, that the increase in consumption reflected some specific factors.

“All other demand components posted declines, including public consumption and investment. Part of the increase in private consumption may be linked to changes in relative prices and the reduction of subsidies, since national accounts are measured at market prices,” he said.

The most striking figure in the report was gross fixed capital formation, one of the main measures of investment. It fell 11.6% from the first quarter of 2025 and declined 1.7% from the previous quarter in seasonally adjusted terms.

The drop was driven mainly by an 18.1% decline in machinery and equipment and a 19.6% fall in transport equipment. Within machinery and equipment, investment in imported goods fell 20.6%, while investment in domestically produced goods dropped 11.5%.

The decline drew attention from analysts because it came as the government is betting on projects tied to the Large Investment Incentive Regime, known as RIGI, to help drive a new expansion cycle.

“This is the fourth consecutive quarter of seasonally adjusted declines in investment. One thing is to submit projects, another is for them to be approved, and another is for them to actually materialize,” said Lorenzo Sigaut Gravina, director of macroeconomic analysis at Equilibra.

Sigaut Gravina added that investment is the only demand component still below 2023 levels and warned that the trend may help explain the decline in formal employment.

Claudio Caprarulo, director of Analytica, also said investment was one of the main warning signs in the report.

“In historical terms, it is a low figure. Since 2011, it is only above recession years such as 2019, 2020 and 2024,” he said.

Caprarulo added that weakness is not limited to public works, but also extends to investment in machinery and equipment.

“If this trend persists, productivity in the economy may suffer sooner rather than later,” he said.

By sector, activity again showed a sharp divergence. Agriculture, livestock, hunting and forestry expanded 18.1%, supported by the crop season. Mining and quarrying rose 12.3%, in line with the growth seen in energy and mining, including the Vaca Muerta shale formation. Fishing jumped 27.5%, helped in part by a low comparison base.

Agriculture was also the sector that contributed the most to overall economic growth. According to official estimates, it accounted for more than one percentage point of total GDP growth in the quarter.

According to container movement data compiled by Datamar, only one of Argentina’s ten leading export products was not related to agribusiness or food products. See below the volumes recorded from January through April:

Top Argentine Exports | Jan–Apr 2026 | TEUs

Fonte: DataLiner (clique aqui para solicitar uma demonstração)

Other sectors with strong performances included financial intermediation, up 7.5%; private households employing domestic staff, up 6.3%; and hotels and restaurants, which rose 2.8%. In the latter case, INDEC said the result was driven mainly by informal employment.

Although GDP reached a new record in seasonally adjusted terms, GDP per capita remains 6% below the record reached in 2011, according to Equilibra estimates.

Construction, one of the sectors hardest hit in 2024, rose 2.5% year on year and ended the quarter in positive territory, though it remained far from fully offsetting the losses accumulated in recent years.

Manufacturing, by contrast, remained in negative territory, falling 1.7% year on year. Public administration declined 1.4%, electricity, gas and water fell 1.1%, and wholesale and retail trade slipped 0.3%.

The first-quarter result also confirmed a slowdown from the growth rates seen through much of 2025. After expanding 6.1% and 6.5% year on year in the first two quarters of last year, GDP growth moderated to 3.2% and 2.2% in the second half. The result was also stronger than expected because the monthly economic activity estimator, EMAE, had pointed to a more moderate expansion.

The figures released on Tuesday contrasted with President Javier Milei’s own assessment in early April, when he described the first quarter as a “difficult” period for economic activity and asked for patience after the financial volatility seen during last year’s election period and the rise in interest rates. The official data ultimately showed that the economy continued to expand, albeit at a more moderate pace than during much of 2025.

After the report was published, Economy Minister Luis Caputo said on social media that activity had reached a “new historic record” in the seasonally adjusted series. He also noted that private consumption reached a record high and that 12 of the 16 sectors tracked posted year-on-year growth.

Still, when adjusted for population growth, GDP per capita remains 6% below the highs reached at the beginning of the previous decade. According to Analytica, GDP per capita is still below the levels seen between 2011 and 2014, as well as the level recorded in 2018. Private consumption per capita, however, has slightly surpassed previous highs.

Adapted from a reporting by Agustín Maza for La Nación

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