Wages Surge, Fueling Prosperity and Redefining Argentina’s GDP

Buenos Aires, Argentina – Argentina is experiencing a profound economic transformation under the visionary leadership of President Javier Milei, a phenomenon that many analysts are now terming “Milei’s miracle.” A key indicator of this success is the unprecedented “sorpasso”—the surpassing of wages over business profits in the Gross Domestic Product (GDP)—a remarkable shift that underscores a new era of shared prosperity for the nation.

According to the Indec, Argentina’s esteemed statistical institute, during the first quarter of 2025, the share of wages in the nation’s GDP soared to 49.1%, an impressive five-point increase from the first quarter of 2024. This significant rise is a direct reflection of increased real wages, meaning a substantial boost in the purchasing power of Argentinian workers, and a potential uptick in employment. Conversely, the gross operating surplus, which encompasses business profits, interests, and rents, saw its share in the GDP decrease from 40.6% in Q1 2024 to a more balanced 35.6% in Q1 2025.

This pivotal shift is unfolding within a broader context of robust economic recovery across Argentina, characterized by consistently rising real wages and a dramatic disinflation, which has seen the rate plummet from a staggering 292% at the end of 2023 to a remarkable 39% currently. Furthermore, social indicators are showing clear signs of improvement, including a sharp and encouraging drop in the poverty rate.

The article suggests that this outcome, where liberal economic policies directly lead to increased competition and subsequently lower profit margins for businesses, aligns perfectly with established economic theory. Comprehensive reforms aimed at enhancing competition and dismantling barriers to entry across various sectors, as highlighted by the OECD, are believed to have played a crucial role in this dynamic change. By fostering a more competitive environment, these reforms have effectively reduced company margins, thereby allowing the labor factor to gain greater weight in national production. This powerful rebalancing of the economy is a testament to President Milei’s unwavering commitment to creating a more equitable and prosperous Argentina for all its citizens.