Different segments of Argentina have different consumer habits. The housing market is experiencing robust growth in Javier Milei’s Argentina. Automobiles are rapidly being sold, and prominent airlines are increasing their flight offerings to Buenos Aires in response to the rising demand for travel. Yet restaurants are increasingly vacant, hotels are at best operating at fifty percent capacity, and shop vacancies are on the rise as the economic recovery begins to falter, particularly for the general populace.
In Argentina, two divergent scenarios are unfolding as the midterm elections approach in three months. The electorate’s views on the economy will significantly influence the extent to which Milei’s party can garner additional backing for its austerity and pro-market policies. Income inequality has long been a persistent issue in Argentina. However, a robust currency serves as a fundamental component of Milei’s initial achievements — reduced inflation and poverty — while simultaneously acting as a catalyst for the nation’s uneven recovery, spearheaded by the libertarian, who is liberalizing a protectionist economy unaccustomed to foreign competition.
On one hand, affluent and educated Argentines are benefiting from Milei’s economic policies, which have resulted in increased purchasing power, subsequently leading to more international travel and significant domestic expenditures. In contrast, the narrative shifts significantly: expenditures on food, apparel, and dining experiences are on the decline, with 60 percent of Argentines expecting to reduce their purchasing activities in the months ahead, as reported by LatAm Pulse, a survey told. The current apprehensions arise as the unemployment rate for salaried, formal positions has reached a four-year peak, concurrently with a decrease in inflation-adjusted wages observed in recent months.
“I’m barely making it to the end of the month,” states Valeria Ruiz, a 44-year-old single mother of two who engages in home cleaning and has recently taken on a travel agency role to augment her monthly income to 600,000 pesos, which amounts to US$465. This figure is lower than her previous earnings in retail with a single salary. Over the last year, Ruiz has eliminated dining out at restaurants. She is currently seeking the most economical options for milk, pasta, and yogurt at the supermarket. “Current conditions are more challenging as the job market has shifted significantly: previously, I consistently had ample work, but now there has been a complete standstill.”
Ruiz is not an isolated case: According to a survey conducted by Management & Fit, 84 percent of Argentines report having altered their consumption habits in response to economic conditions, which includes reductions in expenditures on clothing and dining out. Meanwhile, 67 percent of respondents express a negative outlook on the economy, as reported by AtlasIntel. A survey conducted by Argentina’s statistics agency among supermarkets and wholesalers revealed that 27 percent of store owners hold a negative perspective on the current state of business, in contrast to merely seven percent who express a positive outlook. To date, the prevailing economic pessimism among voters has not adversely affected Milei’s elevated approval ratings. He has successfully reduced inflation, rejuvenated mortgage lending, and eased currency controls for individuals — all measures that resonate positively with the public. To address inflation, the president has relied on a more robust exchange rate that stimulates demand for durable goods, benefiting wealthier Argentines. However, this approach has rendered restaurants, local vacations, and weekend shopping increasingly costly for a significant portion of the population.
The figures are influencing Argentina’s prospects: In June, economists revised their forecasts for this year to a five-percent growth, following a period of consistent upward adjustments over the preceding five months — indicative of a robust recovery after two years of economic contraction. In May, economic activity experienced a downturn, marking the third negative monthly figure of the year, though the decline was relatively modest. Auto sales increased by 78 percent in the first half of the year relative to the same timeframe in 2024, driven by a more than doubling of purchases for Porsche, Audi, and BMW, while Toyota and Volkswagen led in total units sold. Home sales in both the city and province of Buenos Aires experienced an increase of approximately 50 percent through May, while the number of Argentines traveling abroad surged by 64 percent, as indicated by industry reports and government statistics. Delta, American, Latam Airlines, and Aerolineas Argentinas have either introduced or are set to initiate flights to Argentina in response to the increasing demand anticipated later this year.
In the city of Buenos Aires, restaurant spending has declined in five of the last six months, while supermarket activity has yet to recover to levels observed prior to the Milei administration. The count of unoccupied retail spaces in the city increased during the initial four months of this year, reaching a peak of 896, the highest since at least 2022. On average, only 43 percent of hotel rooms nationwide were occupied this year through May, reflecting a consistent decline from the same period in previous years and falling below pre-pandemic levels. “This is what happens with fixed exchange rate regimes — they boost durable goods consumption, appreciate the currency, and bring inflation down quickly,” stated Marcos Buscaglia, co-founder of Buenos Aires-based consultancy Alberdi Partners. The parallel market peso has experienced a real terms appreciation of 57 percent since Milei assumed office 18 months prior. “Additionally, trade liberalisation is exerting downward pressure on dollar prices.”
The liberalization of Argentina’s economy enabled Flavio Ortega, a car dealership salesman located in the prestigious Puerto Madero neighbourhood, to stock his showroom with imported vehicles and achieve sales volumes that had not been realized since 2018. Over the last five years, stringent import restrictions have resulted in 45-year-old Ortega being able to showcase only two cars simultaneously — a configuration that has dissuaded potential buyers. However, auto imports in June experienced an increase of nearly 250 percent compared to the same month last year. “In 2025, with imports restored, we are positioned to present up to 13 vehicles valued at US$80,000 each — and we have already achieved a doubling of last year’s sales,” he stated.
Gaston Aybar achieved a 40 percent increase in real estate transactions during the first half of the year relative to the same period in 2024. The appreciation of the peso, coupled with reduced interest rates that have facilitated mortgage accessibility, along with Milei’s tax amnesty initiative that encouraged Argentines to declare dollar-denominated assets towards the end of the previous year, are contributing to the increase in sales. The realtor indicates that mortgages are enabling middle-class Argentines to purchase or enhance their residences, albeit with the necessity of adhering to stricter monthly financial constraints. “Today is a moment when individuals are seeking to invest in something enduring,” states Aybar, 49. Individuals possessing a modest savings buffer are contemplating whether to allocate funds towards a vehicle or a holiday, or alternatively, to reduce expenditures and pursue a mortgage. There is a notable shift in public sentiment towards investing in housing.