Background on Argentina’s Economic Situation
Argentina has been experiencing a significant imbalance in its current account, with March showing a record deficit of $5,191 million. This outcome is primarily attributed to the surging demand for tourism services, which further exacerbated the deficit in the first quarter of 2025.
First Quarter Performance
According to data released by Argentina’s National Institute of Statistics and Census (INDEC), the current account deficit reached $5,191 million in Q1 2025. This deficit resulted from a $2,060 million income from goods and a $4,502 million outflow for services, largely driven by tourism demand. Additionally, primary and secondary incomes contributed negatively with $3,333 million and $584 million, respectively.
The country’s debt also increased to $5,137 million, leading to a negative outcome in the financial account at -$7,229 million. This figure is comparable to 2023’s levels.
Tourism in May
Preliminary data from this quarter indicates that the deficit in tourism has deepened, even before the impact of the Club World Cup.
- In May 2025, Argentina welcomed 572,000 visitors while 1.3 million left the country, with 66.6% heading to neighboring countries.
- Chile became the most popular destination, with a 52% interannual increase, followed by Brazil, which saw a 93% rise and became the second-most demanded destination.
- Paraguay experienced a 36.7% increase, ranking fourth; Uruguay followed with a 39.4% rise.
- The United States and Canada, along with Europe, also witnessed growth of 19.3% and 42.6%, respectively.
- All transportation modes showed increases: air travel rose by 51.6%, river transport by 57.7%, and land travel by 44.3%.
Lorenzo Sigaut Gravina, director of macro analysis at Equilibra, explained: “The tourism deficit deepened in May 2025. Receptive tourism fell by 14% interannually, while emissive tourism increased by 46%. The deficit in people grew from 234,000 in May 2024 to 742,000 in May 2025 (an increase of 217%). The cumulative deficit in people by May surpasses the previous record by 61%, with the Club World Cup yet to be factored in, taking place in June 2025.”
External Debt
Argentina’s total external debt, measured in nominal values, increased by 0.3% in Q1 2025 compared to the previous quarter. This resulted in a decrease of 0.9% in government debt, offset by an increase in the Banco Central’s debt, along with sociedades captadoras de depósitos, sociedades financieras y no financieras, families, and others.
Key Questions and Answers
- What led to Argentina’s record current account deficit in Q1 2025? The surge in tourism demand significantly contributed to the $5,191 million deficit, along with negative primary and secondary incomes.
- How did Argentina’s tourism sector perform in May 2025? Despite not accounting for the Club World Cup’s impact, Argentina saw 572,000 visitors enter the country while 1.3 million left, with most traveling to neighboring countries like Chile and Brazil.
- What is the status of Argentina’s external debt? The total external debt increased by 0.3% in Q1 2025, driven mainly by the Banco Central’s debt growth.
