The Argentine economy contracted in March due to inflation and currency uncertainty.

The Argentine economy slowed its momentum in March and showed signs of contraction after a 10-month period of recovery. Rising inflation and uncertainty in the foreign exchange market, in the context prior to the partial lifting of the currency controls and the floating of the official exchange rate, were cited as the main causes of this setback.

According to data from the consulting firm Orlando Ferreres, the economy contracted 1.2% monthly in March, although it maintained year-on-year growth of 7.8%. This resulted in a cumulative decline of 7.3% for the first quarter of the year. The Mediterranean Foundation, for its part, revealed that seven of the ten main economic sectors showed less dynamism compared to the end of 2024, with significant declines in sectors such as base metals and plastics.

Comparing the last quarter of 2024 with the first quarter of 2025, only two sectors show an acceleration in growth: financial intermediation and electricity, water, and gas.

Meanwhile, mining maintained a similar pace to that of the end of last year. In contrast, hotels and restaurants experienced a sharp slowdown, impacted by competitiveness issues and the increase in foreign tourism.

The previous economic recovery was led by financial intermediation, agriculture, and mining, which outperformed other sectors.

The food industry showed a recovery comparable to these leading sectors. However, industries such as base metals (-23%), non-metallic minerals (-14%), textiles (-9%), and rubber and plastics (-9%) are experiencing a sharp decline, similar to that affecting construction.

Gonzalo Semilla , Creebba's chief economist, noted that March was influenced by seasonal and external factors, such as the trade war between the United States and China, which affected Argentine exports. "This brought with it currency turbulence, putting upward pressure on the exchange rate and increasing intervention by the Central Bank," he explained.

Economist Federico Vaccarezza identified the financial, oil, and agribusiness sectors as the main drivers of growth in March, with a partial recovery in the construction sector. "The manufacturing industry has shown better indicators than in 2024, but it is still far from the activity levels of 2022 and 2023. Consumption has not yet fully recovered," he added.

Vaccarezza estimated year-over-year growth of 4.2% to 4.7% in March and an average of 5.2% to 5.5% for the first quarter.