Argentine businesses that depend on domestic consumers are facing a difficult adjustment as weak demand coincides with greater competition from imported goods. Around 32,300 companies—about 6% of the country’s total—closed between Javier Milei’s inauguration in December 2023 and July this year, according to research center Fundar.
Eseka, a family-run Buenos Aires manufacturer of underwear and swimwear, still produces nearly three million items a month. But its sales have fallen by about 40% since Milei took office, its owners said. The company recorded a loss last year, cut its workforce by around 30%, and has more than half of its circular knitting machines idle.
Its co-owner Ricardo Kuchikian said consumer spending had dropped sharply over the past three years. Across Argentina, consumption in the first nine months of the year was down 2.7% compared with the same period in 2025, according to market research firm Scentia.
Milei’s government has eased import restrictions and other rules that had constrained businesses. Investors have welcomed the changes, but local companies say cheaper imports are intensifying competition just as domestic demand weakens. Martin Abigador, director of family-run fabric distributor Dakuba, said sales had declined by an estimated 40% since late 2023 and that the company had struggled to compete with imports, particularly from China.
Official figures for August showed industrial activity down 3.2% year over year, wholesale and retail trade down 3.5%, and construction down 2.5%, according to Argentina’s statistics agency, Indec.
Economists say the economy likely contracted for a second consecutive quarter between July and September, which would meet the usual definition of a recession. Official data for the period are due in November. Ricardo Delgado, director of consultancy Analytica, described the economy as being in a moderate technical recession. Gross domestic product fell 0.6% in the second quarter from the first, and Delgado forecasts a further decline of about 1.5% in the third.
Milei’s austerity measures have brought inflation down from around 200% to 30% and helped address other macroeconomic imbalances, but the benefits have not reached much of the population. The share of Argentines living below the poverty line has risen to nearly one-third, after falling in 2025 to its lowest level in eight years.
The downturn is uneven. Energy, mining and agriculture have benefited from exports and investment in Argentina’s oil, gas and mineral resources, including lithium. But those export-oriented sectors have not offset the weakness in industries that rely more heavily on domestic demand, including textiles, automotive, retail and construction.
A recent survey by consultancy Giacobbe y Asociados put Milei’s approval rating at 36% in October, while disapproval stood at 56%. The figures come a year before the October 2027 presidential election, in which Milei is widely expected to seek a second term.
Milei has rejected calls to change his economic plan. A government spokesperson defended the uneven pace of recovery, saying growth does not happen uniformly across sectors, and said the president would not alter the program.
Sources: Folha Mercado.