MercoPress. South Atlantic News Agency

Indebtedness is the true basis of Milei's Argentina's shallow recovery, UBA says

Supermarkets are decumulating stock amid waning consumption

A study from the University of Buenos Aires' (UBA) School of Economics revealed this week that almost half of Argentines (46%) are now using credit cards to buy food, a significant increase since the start of the Javier Milei administration.

The report highlights that this growing reliance on debt to cover basic necessities is a symptom of a weak domestic market and a decline in purchasing power. Despite a slight monthly increase in some sales, overall wholesale and supermarket operations remained significantly below the levels seen at the beginning of Milei's presidency, with cumulative declines of 34% and 28% respectively. The study concludes that consumption is being sustained by debt rather than a true economic recovery.

This data from the Center for Argentine Recovery Studies (Centro RA) reflected “a still delicate situation in terms of mass consumption.”

“Demand has not fully recovered and remains below pre-administration levels. The persistent contraction in wholesale sales, coupled with the growing use of financing for the purchase of basic goods, suggests that consumption is being partially sustained by debt mechanisms, in a context of weakening purchasing power and high economic uncertainty. These elements, taken together, highlight the difficulties faced by the domestic market in consolidating a sustained recovery,” the document noted.

By May 2025, wholesale supermarket sales contracted by nearly 5% year-on-year, despite registering a slight increase—less than 1%—compared to the previous month. In the case of supermarkets, there was an interannual increase of 6.1%, albeit with a monthly decline of 1.2%.

“After 29 months in office, sales levels in both wholesalers and supermarkets have not managed to recover to the values seen at the beginning of the term,” the study emphasized.

“Although there has been sustained growth in supermarket sales over the last five months, this has not been enough to offset the previous cumulative decline of nearly 10% from the beginning of the administration until the sustained 'recovery' that began in January 2025. This means that the cumulative decline in supermarket sales during the administration is close to 7%,” the report also found.

The study also warned of a “stock decumulation” by supermarkets, which are selling merchandise purchased in the past without new wholesale purchases, revealing a persistent weakness in the consumption cycle.