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Argentina Overview

    Context

    With a Gross Domestic Product (GDP) of more than US$ 540 billion, Argentina is one of the largest economies in Latin America. In recent years, the country has focused on economic development with social inclusion.

    On the international front, Argentina enjoys good relations with most of the countries in the region, particularly Brazil and Venezuela. The country also plays a leading role in regional policymaking in its capacity as a representative of Latin America in the G-20, jointly with Mexico and Brazil.

    Argentina's economy is characterized by its valuable natural resources. Thanks to its large-scale agricultural and livestock industry, the country is a major food producer. It is among the world’s largest beef exporters and the leading producer of sunflowers, yerba mate, lemons and soybean oil. The opening of the Chinese market has helped boost the country’s export potential.

    The economy has grown steadily during the past decade. Argentina has invested heavily in health and education, areas which account for 8% and 6% of GDP, respectively. Between 2003 and 2009, the middle class doubled in size, from 9.3 million to 18.6 million (equivalent to 45% of the population).

    The country has prioritized social spending through various programs, including the Universal Child Allowance, which reaches approximately 3.7 million children and adolescents up to age 18, 9.3% of the population.

    In recent months, the country’s external sector has faced significant challenges. During 2014, fiscal accounts had a primary deficit of 0.9% of GDP and a total deficit of 2.5% of GDP. Public sector revenue rose 42.5% whereas spending increased 45% as compared with the previous year. Growth forecasts for 2015 range from 0% to 1%. 

    Last Updated: Apr 20, 2015

    LENDING
    Argentina: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Strategy

    The WBG strategy is built around three broad themes:

    • (a) sustained employment creation in farms and firms
    • (b) improving availability of assets for people and households
    • (c) reducing environmental risks and safeguarding natural resources

    These thematic areas were selected for their contribution to achieving sustained poverty reduction and shared prosperity.

    Some emblematic programs will contribute to reduce average transit time to city centers from poor neighborhoods in two metropolitan areas by 15%; or to increase by 12% the gross value of agricultural production ($/ha) of 80,000 small and medium-size farms in lower-income areas; and will support an increase in effective national healthcare coverage from 28% to 50%. 

    The new strategy focuses on working with the country’s poorest provinces and in large urban areas.  There will be support for programs designed to increase the employability of young people through training, apprentice programs and corporate partnerships. In large cities, the strategy will promote activities that include logistics solutions, urban transport, basic services, skills development and governance in communities and low-income municipalities.

     

    Last Updated: Apr 20, 2015

    LENDING
    Argentina: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Results

    Argentina currently has a portfolio of 22 investment projects with US$ 5.7 billion in committed loans and five grants from the Global Environment Facility (GEF) for US$ 32.8 million. The portfolio concentrates on programs in health, environment, education, infrastructure, the labor market and social protection.

    In the framework of the new strategy, approved projects include the following: the second Project to Improve Rural Education (US$ 250 million), which will benefit more than one million students and teachers in rural areas;  Support to Youth Employment (US$ 425 million), which promotes the employment of some 540,000 vulnerable youth; Renewable Energy for Rural Areas (PERMER II, US$ 200 million), which works to expand access of isolated rural populations to alternative energy; and,  Native Forests and Community Project (US$ 58.7 million), which supports sustainable forest management in the Gran Chaco zone.

    In the northern provinces of Catamarca, Chaco, Corrientes, Formosa, Jujuy, Misiones, Salta, Tucumán and Santiago del Estero, a region that is home to 7.5 million people, the World Bank has provided US$ 800 million for water and road infrastructure projects that form part of the National Government’s Norte Grande Development Program.

    Social safety nets are the focus of a US$ 480 million loan for the Basic Social Protection Plan, which aims to increase the effectiveness of Argentina's conditional cash transfer programs for the unemployed and families with children under age 18: the Training and Employment Insurance (SCE) and family allowances, including the Universal Child Allowance.

    Health care is supported by the US$ 400 million Plan Sumar to improve access to health services for the nearly 70% of the population without health insurance, with an emphasis on children, adolescents and low-income women through conditional cash transfers. Moreover, the Basic Public Health Functions Project (US$ 461 million) includes seven health programs to address chronic diseases, safe blood and HIV/AIDS, among others.

    In the environmental area, the Matanza-Riachuelo Basin Sustainable Development Project provides US$ 718 million in assistance to clean up the river basin by improving sewage services and expanding water treatment capacity.

    The Program to Promote Productive Innovation seeks to improve Argentina's knowledge industry by supporting highly skilled human capital and knowledge-based enterprises.

    Throughout the country, some 70,000 small and medium-scale farmers—one-third of all farmers— are benefiting from initiatives such as the Second Provincial Agricultural Development Project (PROSAP), which provides US$ 300 million in assistance to support new public infrastructure and investment in services in rural areas.

    Finally, the US$ 30 million Road Safety Project has reduced the rate of traffic injuries and fatalities by strengthening the country's institutional framework and road safety management system.

    Last Updated: Apr 09, 2014

    LENDING
    Argentina: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
Country Office Contacts
ARGENTINA +5411 4316-9700

Bouchard 547, piso 29 CP1106. Buenos Aires

ccrerar@worldbank.org
USA +1 202 473-1000

1818 H Street NW, Washington, DC 20433

ccrerar@worldbank.org