Argentinas industry records the second-worst decline worldwide in two years

Argentina recorded the world’s second-worst industrial decline from 2023 to 2025, said a consulting firm that analyzed data from the United Nations. In the last two years, Argentina’s manufacturing sector fell by 7.9%, surpassed only by Hungary, which fell by 8.2%, said the consultancy Audemus, founded by former Minister of Productive Development Matías Kulfas. Audeumus analyzed data from 56 out of the 81 countries surveyed by the United Nations Industrial Development Organization. The report said that while in Europe the causes for the crisis are partly exogenous — “the energy shock, Chinese competition in the automotive sector, and trade tensions with the United States” —, the manufacturing situation in Argentina “is a response to domestic economic policy decisions.” “The global or regional context cannot explain Argentina’s industrial decline,” the report added. “The crisis is local, has identifiable causes, and is a response to an economic policy orientation that the current government is not only failing to review but is defending as a virtue,” it said. In their investigation, Audemus added that the regional data is most telling, as “Brazil expanded its industry by an average of 3.5% over these two years” and that Chile (+5.2%), Peru (+6.5%), and Uruguay (+3.7%) also grew. Colombia and Mexico declined, the report said, “but within minimal ranges (-0.7% and -0.4%).” Factories closed and jobs lost Since Milei took office, Argentina’s manufacturing sector has struggled amid import liberalization and weak domestic demand. So far, during the libertarian economist’s administration, more than 2,400 industrial companies have closed and 73,000 manufacturing jobs have been lost, according to official data — 5% of the country’s total industrial companies, said Audemus. According to the national statistics institute, the INDEC, factories are operating at just 53.8% of installed capacity.  During Sunday’s start-of-the-year speech in Congress, President Javier Milei lambasted Paolo Rocca and Javier Madanes Quintanilla, two of the main industrial businessmen in Argentina. For months, the libertarian leader had been at odds with them, as Rocca’s firm, Techint, lost out on a pipeline construction contract to an Indian company, and Madanes Quintanilla’s tire manufacturer, Fate, shut down two weeks ago. Using mocking nicknames, Milei accused them of setting their prices too high and, in Madanes Quintanilla’s case, using the layoff of 920 Fate employees as “extortion.” Last week, before Milei’s labor reform was passed, Martín Rappallini, the head of the powerful Argentine Industrial Union (UIA), celebrated the new legislation, but said it would “not create jobs” immediately — he said that, to do that, Argentina’s industry should grow homogeneously and the government should lower taxes. “On the one hand, we have the economic downturn, and on the other, we have the opening up of the economy to control prices and lower inflation,” he told the Herald.  “What we are saying is that we need to implement a cost reduction plan to level the playing field, which is what we have been asking for the past two years — we want to compete, but lower taxes on tradable goods, that is, on those that compete with the world, so that we can keep up with at least Brazil and Mexico,” he added.A senator for the ruling party, La Libertad Avanza, Francisco Paoltroni, said that under previous protections, business owners were “hunting at the zoo”, arguing that Argentina should focus on sectors where it is “naturally competitive” – agriculture, livestock, mining, oil and gas. “What God gave us,” he told the Herald.