Key Takeaways:
- Argentina’s economy is experiencing a dual reality, with some sectors growing strongly, such as real estate, automotive, and electronics, while others, like mass consumption and retail, struggle to recover.
- The country’s consumption patterns are increasingly fragmented, with a 30% of the population, mainly from the private sector and self-employed, driving growth, while the remaining 70% face significant economic challenges.
- The economic recovery is slow and uneven, with a decline in poverty, but a persistent unemployment rate and a lack of growth in formal employment.
Argentina is currently experiencing a unique economic phenomenon, where two distinct realities coexist. On one hand, sectors like real estate, automotive, and electronics are booming, with records being set in property sales, car registrations, and appliance sales. Additionally, more Argentines are traveling abroad, and international brands are entering the Buenos Aires market. However, this contrasts with the struggles faced by the mass consumption and retail sectors, which are yet to recover from the economic downturn.
According to Guillermo Oliveto, CEO of consultancy W, “We’re facing a dual society, with dual consumption patterns. On one hand, there are sectors growing at high rates, driven by employees from the private sector and self-employed individuals who are in a good position. These households are beating inflation, their dollar-denominated income has doubled, and they now have access to credit, but they represent only 30% of the population.”
The economist Lorenzo Sigaut Gravina, director of Macroeconomic Analysis at Equilibra, notes that “the appreciation of the dollar, access to credit, and lower import tariffs are driving growth in durable goods and imports, including a 30% increase in outbound tourism in April. However, mass consumption has not fully recovered from the significant blow it suffered in 2024.”
The slow recovery of consumption is confirmed by a study by consultancy Kantar, which projects a 2% increase in food, beverages, toiletries, and cleaning products sales this year, which is less than half of the 4.3% decline experienced in 2024. Esteban Cagnoli, managing director for Argentina at Kantar, states, “Greater price stability is generating a more favorable scenario for mass consumption, but the recovery is not homogeneous and continues to show fragmentation by socioeconomic level.”
The contrast between the two realities is also evident in the business world. While some companies, like Dreamco, owner of cleaning and personal care brands, are investing $10 million this year, others, like Cadam, which represents supermarkets and wholesale stores, report stagnant sales.
The dual reality of consumption in Argentina is a complex issue, reflecting the country’s ongoing struggle to achieve economic stability and growth. As the government and businesses navigate this challenging landscape, it remains to be seen how the economy will evolve and whether the recovery will become more widespread.
Read More:
https://www.lanacion.com.ar/economia/negocios/las-dos-realidades-del-consumo-nid01062025/