Argentina’s economy is at an unusual juncture. Unlike many other periods in the country’s recent history, the volatility of the U.S. dollar — long the country’s main economic obsession — is no longer at the center of the debate.

Inflation isn’t either. Although it remains high compared to the rest of the region—coming in at 1.9% in June—it has shown signs in recent months of resuming its downward trajectory.

That does not mean, however, that President Javier Milei’s economic model is free from criticism.

Instead, criticism has shifted toward the sectors most closely tied to domestic consumption: manufacturing, construction, and retail. These are also among the country’s largest employers.

The real economy, Milei’s biggest casualty

Not every part of the real economy is struggling. The oil and gas sector is experiencing a boom, driven by the sharp increase in production at Vaca Muerta.

Other labor-intensive sectors, however, have been hit hard. These include retail, construction, and manufacturing — with manufacturing perhaps the biggest casualty of the administration’s economic model.

Between November 2023 — the month before Milei took office — and June 2026, according to Argentina’s national statistics agency (INDEC), industrial output fell by 7%. Industrial capacity utilization currently stands at 58.4%.

One of the most high-profile cases was the closure of tire manufacturer Fate, founded in 1940 and long considered a symbol of Argentine industry.

In recent days, Economy Minister Luis Caputo sought to downplay the industry’s difficulties, dismissing critics as “idiots.”

“It sounds as if we had been experiencing an industrial boom, that between 2011 and 2023 the economy was thriving, and that industry was highly competitive and growing spectacularly. The reality was exactly the opposite,” he said.

During that period,........

© Buenos Aires Herald