Argentina’s economy expanded 2.3% year-on-year in the first quarter of 2026, and 0.7% against the previous quarter in seasonally adjusted terms, according to data released on Tuesday by the national statistics institute, Indec. The headline figure, which exceeded the 1.7% median forecast in a Reuters poll of analysts, was propelled by a 9.8% surge in exports and a 2.7% rise in private consumption. Yet the composition of that growth immediately drew scrutiny: gross fixed capital formation collapsed 11.6% year-on-year, driven by steep declines in purchases of domestically produced machinery and transport equipment, while manufacturing output contracted 1.7%.

On the supply side, the expansion was heavily concentrated in primary sectors. Fishing output jumped 27.5%, agriculture and livestock grew 18.1%, and mining and quarrying, which includes lithium and Vaca Muerta hydrocarbons, rose 12.3%. Financial intermediation and domestic services also posted gains. By contrast, alongside manufacturing, public administration shrank 1.4% and wholesale and retail trade edged down 0.3%. Twelve of sixteen activity sectors recorded growth, but the two largest detractors—industry and public administration—together subtracted 0.3 percentage points from overall GDP.

The Milei administration celebrated the data as a historic milestone. Economy Minister Luis Caputo highlighted that both GDP and private consumption reached new highs in the seasonally adjusted and trend-cycle series, and noted that the trend-cycle indicator had expanded for an eighth consecutive quarter. Viewed from Buenos Aires, however, several economists cautioned that the consumption figure is partly an artefact of relative price shifts and a surge in imported consumer goods and automobiles, rather than a broad-based improvement in household welfare. Guido Zack of the Fundar think-tank observed that the indicator can rise without translating into better living standards, while Andrés Asiaín of the Scalabrini Ortiz centre described a model that redistributes income unevenly, favouring sectors linked to imports and outbound tourism.

Labour-market and financial-stress indicators reinforced the picture of an uneven recovery. The unemployment rate stood at 7.8% in the first quarter, up from 5.7% when President Javier Milei took office in late 2023, and informal labour reached 44% of the workforce. Household bank delinquency soared from 3.7% in April 2025 to 12.1% a year later, the highest in two decades, prompting public banks to launch debt-restructuring programmes. Brazilian observers noted that while Argentina attracted billions in mining and energy investment through 30-year tax and customs exemptions, those capital-intensive sectors generate limited employment, whereas contracting industries such as manufacturing and retail are more labour-intensive and oriented to the domestic market.

The central bank’s monthly survey of economists projects GDP growth of 2.9% for the full year 2026, following a 4.4% expansion in 2025. The next factual milestone will be the release of the monthly economic activity estimator for April, which will indicate whether the first-quarter momentum has carried into the second quarter amid persistent weakness in investment and formal employment.