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How has the Argentina economy performed since the bailout?
Executive summary
Argentina’s economy has moved from deep instability in 2023–early 2024 toward a visible stabilization and rebound after the international bailout (an IMF/EFF-like package renewed in April 2025 and a larger US-backed package later reported), with major agencies forecasting GDP growth around 4–5% in 2025 and inflation falling sharply from triple‑digit rates (211% end‑2023) to much lower levels by 2025 (e.g., 47% in April 2025), while social costs and market volatility remain important caveats [1] [2] [3]. Reporting and analysts disagree on durability: official and multilateral forecasts are optimistic about a sustained recovery, while market indicators (stocks, fiscal politics, poverty figures) and some commentators warn about social hardship, political fragility and exchange‑rate risks [1] [4] [5].
1. A turnaround in macrodata — growth and inflation
After consecutive contractions in 2023–early 2024, major institutions and private forecasters report a rebound: the OECD and others project robust GDP growth (OECD projects 5.2% in 2025 and 4.3% in 2026), and Reuters polling and private houses point to multiple quarters of expansion in 2025 [1] [6]. Inflation has fallen markedly from the extraordinary rates of 2023 (reported at ~211%) to much lower rates by mid‑2025 — the OECD records annual inflation dropping to 47% in April 2025 — signaling disinflation though still well above typical advanced‑economy norms [1] [2].
2. The bailout and policy shift that set the frame
The economic shift followed an ambitious reform and stabilisation program that accompanied fresh international financing (including a renewed IMF framework and large external support noted in reporting), and the removal of currency and capital controls in April 2025 intended to restore market confidence and investment. The OECD explicitly links reform measures and the lifting of capital controls to improved sentiment and a renewed investment cycle [2] [1].
3. Where the recovery shows most strength — investment, exports, wages
Forecasts and market measures point to gains in private consumption, investment and exports as the main drivers of the rebound: the OECD and private banks highlight higher real disposable incomes, improved financing conditions and a lift to private investment as channels for 2025 growth [1] [7]. Some reporting also notes real wages recovering past 2023 levels and fiscal balances moving into surplus in 2024–25, suggesting traditional macro imbalances are being addressed [1] [7].
4. Social costs, poverty and political backlash
Multiple sources emphasise the sharp social cost of the stabilization: deep cuts in public spending, job losses in the public sector and austerity measures have pushed poverty and hardship higher — ArgentinaReports cites poverty at 57.4% in January 2025 — and commentators warn that social pain could limit political room for sustained reform [5]. This perspective contrasts with macro forecasts that focus on aggregate recovery while noting distributional consequences [7] [1].
5. Market sentiment is mixed — equities, FX and reserves
Markets show heterogenous signals. Some polls and banks forecast continued expansion, but Argentina’s stock market has been volatile and in 2025 performed poorly in dollar terms, becoming one of the worst‑performing markets amid political unease (El País reporting on 2025 declines) [4]. Currency regime changes and reserve constraints remain live risks cited by analysts, even as capital controls removal aims to strengthen confidence [4] [2].
6. Forecast divergence and key downside risks
While OECD, Santander, Allianz and other forecasters expect double‑digit improvements in macro indicators and GDP growth of roughly 4–5% in 2025, they explicitly warn of risks: high interest rates, political instability, persistent poverty, and external financing needs (bond and IMF servicing) could reverse gains if confidence falters or shocks arrive [1] [8] [9]. Reuters and other polls underscore caution even amid positive quarterly prints [6].
7. What to watch next — tests for the recovery
Near‑term indicators to judge whether the bailout turned into durable stabilization: (a) monthly GDP/EMAE continuing positive year‑on‑year gains and seasonally adjusted improvement (Reuters; Trading Economics), (b) further disinflation toward single digits over the medium term per private forecasts, (c) rebuilding of international reserves and smooth external debt service, and (d) political acceptance of reforms to avoid abrupt policy reversals [6] [10] [9].
Conclusion — hopeful but contested: official institutions and many market analysts present an agenda‑driven success story of stabilisation and a substantial 2025 rebound tied to the bailout and reforms, but reporting from markets and social commentators stresses severe social costs, political risk and market volatility that could undermine the recovery if not managed [1] [7] [5] [4]. Available sources do not mention longer‑term outcomes beyond 2026 in detail; continued monitoring of monthly activity, inflation trajectories and social indicators is required to judge durability [1] [10].