Argentina Jan. industrial production falls 3.2% y/y

Argentina Jan. industrial production falls 3.2% y/y

Argentina’s industrial production contracted 8.7% year-on-year in November 2025, according to data from the national statistics agency, marking a sharp acceleration from the 2.9% decline recorded in October. Fifteen of sixteen manufacturing divisions reported annual declines, with textiles (-36.7%), motor vehicles and auto parts (-23.0%), and metal products (-18.6%) among the hardest-hit sectors. The contraction reflects a broader two-year trend, during which Argentina’s manufacturing sector fell 7.9%—the second-worst decline globally, behind only Hungary’s 8.2% drop, per a report by Audemus, a consultancy founded by former Minister Matías Kulfas.

The report attributed Argentina’s industrial slump to domestic economic policies rather than external factors, noting that regional peers like Brazil (+3.5%), Chile (+5.2%), and Peru (+6.5%) expanded their industries over the same period. Since President Javier Milei took office in late 2023, over 2,400 industrial firms have closed, and 73,000 manufacturing jobs have been lost, with factories operating at just 53.8% of installed capacity.

Milei’s administration has prioritized import liberalization and fiscal austerity to curb inflation, which has fallen from nearly 290% to more manageable levels. However, industry leaders argue that reduced protections and weak domestic demand have exacerbated the downturn. Martín Rappallini of the Argentine Industrial Union (UIA) emphasized the need for tax cuts on tradable goods to improve competitiveness. Meanwhile, critics within the ruling party, such as Senator Francisco Paoltroni, advocate shifting focus to Argentina’s “naturally competitive” sectors like agriculture and mining.

With industrial output remaining a key challenge, policymakers face pressure to balance inflation control with measures to revive manufacturing activity.