Argentina economy faces industrial decline and rising informality

Argentina is facing widespread economic contraction across multiple sectors. Industrial activity, according to the Unión Industrial Argentina (UIA), fell by an estimated 0.6% in July, bringing the year-to-date decline to 2%. While a 1.4% year-on-year increase was noted for July, experts attribute this to a low comparison base rather than a sustained recovery. Key sectors such as construction and automotive production continue to struggle, with cement shipments and vehicle production seeing significant drops.

Consumer spending and retail also show signs of distress. Supermarket sales in several provinces, including Salta, have plummeted, with some regions recording their worst performance in nearly a decade. Nationally, real supermarket sales fell by 9.2% in the first half of the year compared to the nine-year average. While household consumption of goods and services saw a slight 2% year-on-year increase in July, partly driven by exceptional events, inflation remains a significant factor.

The labor market is also under pressure. Domestic workers have seen a loss of over 30,000 formal positions between late 2023 and mid-2026, with 77.5% of the sector now working informally without social security or health coverage. Additionally, the private sector has experienced a continuous decline in registered employment for over a year.