Argentina’s Leading Indicator MoM surged 5.97% in November 2025, a striking rebound from October’s -0.85% and well above the -0.20% consensus forecast. This indicator, sourced from the Sigmanomics database, captures short-term economic momentum by aggregating key variables such as industrial output, retail sales, and employment trends. The 5.97% rise is the highest monthly increase since March 2025’s 2.31%, and it contrasts sharply with the steep -4.72% drop recorded in September.

Drivers this month

• Industrial production accelerated, contributing 2.40 percentage points (pp).
• Retail sales rebounded strongly, adding 1.80 pp.
• Employment gains in services and manufacturing sectors added 1.20 pp.
• Exports showed modest improvement, contributing 0.30 pp.
• Inflation pressures remained elevated but did not dampen activity.

Policy pulse

The Central Bank of Argentina (BCRA) maintains a restrictive monetary stance, with benchmark rates near 75% to combat inflation above 110% YoY. The leading indicator’s sharp rise suggests some easing in financial conditions, but inflation remains a key constraint. The indicator’s current level is still below the 12-month average of 1.10%, indicating recovery is nascent rather than sustained.

Market lens

Immediate reaction: The ARS/USD exchange rate strengthened 0.50% within the first hour post-release, reflecting improved sentiment. The 2-year sovereign yield tightened by 15 basis points, while breakeven inflation rates edged down slightly, signaling cautious optimism among investors.

The Leading Indicator MoM is a composite measure reflecting Argentina’s short-term economic trajectory. Its components include industrial output, retail sales, employment, and export volumes. The November print’s 5.97% gain contrasts with the subdued growth of earlier months, such as June’s 0.32% and August’s 0.11%, and sharply reverses the negative trend observed in September and October.

Monetary Policy & Financial Conditions

The BCRA’s tight monetary policy aims to rein in inflation, which remains stubbornly high at over 110% YoY. Despite this, the leading indicator’s jump suggests some loosening in credit availability or improved business confidence. Financial conditions, however, remain fragile, with high real interest rates and limited foreign exchange reserves constraining growth.

Fiscal Policy & Government Budget

Argentina’s fiscal deficit remains elevated, with government spending focused on social programs and subsidies. The November indicator’s rise may reflect temporary stimulus effects or improved tax collection. However, structural fiscal imbalances persist, limiting the government’s ability to sustain growth without external support.

External Shocks & Geopolitical Risks

Global commodity price volatility and geopolitical tensions in key export markets continue to pose risks. The recent recovery in exports (0.30 pp contribution) is encouraging but vulnerable to external shocks. Currency volatility and capital flight remain concerns amid ongoing negotiations with international creditors.

What This Chart Tells Us

Market lens

Immediate reaction: The ARS currency appreciated 0.50%, while sovereign bond yields tightened, reflecting improved investor confidence. Inflation breakevens declined marginally, suggesting tempered inflation expectations despite ongoing price pressures.

Looking ahead, Argentina’s economic trajectory hinges on several factors. The leading indicator’s sharp rise signals a potential recovery, but risks remain elevated. We outline three scenarios:

Bullish Scenario (30% probability)

• Continued industrial and retail growth driven by easing financial conditions.
• Inflation moderates below 90% YoY by mid-2026.
• Fiscal consolidation progresses, restoring investor confidence.
• Exports benefit from stable commodity prices and improved trade relations.

Base Scenario (50% probability)

• Growth remains modest with monthly indicator fluctuating around 1-3%.
• Inflation stays elevated near 100% YoY, limiting real income gains.
• Fiscal deficits persist but are managed without crisis.
• External shocks cause intermittent volatility but no major disruptions.

Bearish Scenario (20% probability)

• Inflation spikes above 120% YoY, eroding purchasing power.
• Monetary tightening deepens recessionary pressures.
• Fiscal imbalances worsen, triggering capital flight and currency depreciation.
• External shocks disrupt exports and financial markets.

Structural & Long-Run Trends

Argentina faces long-term challenges including inflation inertia, fiscal deficits, and limited productivity growth. The leading indicator’s volatility reflects these structural headwinds. Sustainable growth requires reforms to stabilize prices, improve fiscal discipline, and enhance competitiveness.

The November 2025 Leading Indicator MoM reading of 5.97% signals a tentative economic rebound for Argentina after months of contraction. While this is a welcome development, the broader macroeconomic context remains challenging. Inflation, fiscal deficits, and external risks continue to weigh on growth prospects. Policymakers must balance tightening monetary policy with measures to support productive sectors. Investors should monitor upcoming data releases closely, as volatility is likely to persist.

Key Markets Likely to React to Leading Indicator MoM

The sharp rebound in Argentina’s Leading Indicator MoM is expected to influence several markets. The YPF stock, a major energy sector player, often tracks domestic economic momentum. The currency pair USDPEN may react due to regional currency correlations. Sovereign bond yields like AL30 are sensitive to fiscal and growth outlooks. The cryptocurrency BTCUSD could see volatility amid risk sentiment shifts. Lastly, the equity index MERVAL reflects broader market sentiment tied to economic indicators.

FAQs

What is the Leading Indicator MoM for Argentina?

The Leading Indicator MoM measures monthly changes in key economic variables to gauge short-term growth momentum in Argentina.

How does the November 2025 reading compare historically?

The 5.97% rise is the strongest monthly gain since March 2025 and reverses recent declines seen in September and October.

What are the main risks to Argentina’s economic outlook?

High inflation, fiscal deficits, external shocks, and monetary tightening pose significant downside risks.

Takeaway: Argentina’s Leading Indicator MoM rebound signals potential recovery but remains vulnerable to inflation and fiscal pressures.