The results, which also mark a 0.8-percent GDP growth compared to the last quarter of 2024, place Argentina’s GDP growth at a higher rate than China’s 5.4 percent growth — an amount reportedly measured in April at a time when Chinna rushed its exports ahead of President Donald Trump imposing increased tariffs on Chinese goods.
Argentine Economy Minister Luis Caputo explained on social media that, in addition to the 5.8 percent in annual GDP growth documented by INDEC, private consumption in Argentina grew by 11.6 percent, investment by 31.8 percent, and exports by 7.2 percent. Caputo emphasized that the results are “in a context of collapsing inflation and relative price recomposition. No defaults, no broken contracts, and a capitalized Central Bank.”
“In terms of private consumption, seasonally adjusted figures show that the first quarter of 2025 was the highest on record (+0.6 percent vs. the previous record set in the fourth quarter of 2017),” Caputo detailed. “Investment in machinery and equipment was the highest ever for a first quarter. The same was true for transportation equipment. Exports were the highest ever for a first quarter, and the third highest ever (the second was the fourth quarter of 2024).”
President Javier Milei celebrated the results on social media with the now-famous catchphrase “neighborhood phenomenon,” which opponents used derisively during his presidential race to argue that Milei and his libertarian movement had limited appeal. Milei often uses the phrase to celebrate when one of his comments, government policies, foreign visits, and meetings gain international traction.
Argentine economist Natacha Izquierdo explained to the local newspaper La Nación that the nation’s measured GDP growth was led by a widespread rebound in key activity sectors such as manufacturing, construction, and commerce while service-intensive activities, such as hotels, restaurants showed “unusual dynamism, associated with economic restructuring and the recovery of consumption.”
“It cannot be explained by a technical rebound, but rather by a clear sign of productive capital recovery, that is, companies that were on the defensive are beginning to make strategic decisions to grow, anticipating a more stable cycle,” Izquierdo said. “Growth is not uniform nor does it resolve all weaknesses, but the data confirms that the turning point is now behind us and that the real economy is beginning to regain momentum.”
Immediately upon taking office in December 2023, President Milei implemented a series of drastic “shock therapy” measures to avert the complete collapse of Argentina’s economy after the disastrous and pro-China socialist administration of his predecessor, Alberto Fernández, left Argentine on the verge of a catastrophic hyperinflation spiral and virtually depleted of foreign cash reserves.
Since then, inflation in Argentina dramatically dropped from 25.5 percent in December 2023 to 1.5 in May 2025, the lowest measured in five years. Most notably, in April, after securing a $20 billion deal with the International Monetary Fund (IMF), Milei lifted most of the strict and highly convoluted foreign currency controls imposed over the course of nearly two decades by previous socialist administrations, allowing Argentines to once again freely purchase and trade in U.S. dollars and other foreign currencies without restrictions.
At the time, the IMF reportedly forecasted that Argentina would grow its GDP by 5.5 percent, 0.5 percent up from its January forecast, and 0.3 percent lower than the 5.8 percent measured by INDEC this week.
Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.
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