With a Gross Domestic Product (GDP) of more than US$500 billion, Argentina is one of the largest economies in Latin America.
Argentina has vast natural resources in energy and agriculture. Within its 2.8 million square kilometers of territory, Argentina is endowed with extraordinary fertile lands and has great potential for renewable energy. It is a leading food producer with large-scale agricultural and livestock industries. In addition, Argentina has significant opportunities in some manufacturing subsectors, and innovative services in high tech industries.
However, the historical volatility of economic growth and the accumulation of institutional obstacles have impeded the country’s development. Urban poverty in Argentina remains high, approximately 50 percent higher than in new HICs countries and almost two times that of OECD countries. The incidence of poverty reaches 41% among children aged 0 to 14 years old.
To deal with this situation, the country has prioritized social spending through various programs, including the Universal Child Allowance, which reaches approximately 4 million children and adolescents up to age 18, 9.3% of the population.
Over the past years, Argentina has been working on an ambitious structural reform agenda, while starting to correct some of the macroeconomic imbalances. The new administration has moved with significant speed to implement core reforms such as the unification of the exchange rate, the agreement with international creditors, the modernization of the import regime, reduction of inflation and reform of national statistics system.
In addition, Argentina has taken a very active role on the international stage and was in charge of the presidency of the G20 in 2018, expressed intention to join the OECD and became an observer in the Pacific Alliance.
Financial turbulences in 2018 led to a 50.6% depreciation of the Argentine peso and implied the revision of the economic plan and a US$ 57 billion agreement with the International Monetary Fund (IMF) until 2021, which includes a strong reduction of expenditure. In 2018, the government met its fiscal objectives, and aims to achieve the primary fiscal balance in 2019 and a primary fiscal surplus of 1% in 2020.
The economic context remains volatile. After a fall of 2.5% of GDP in 2018, a contraction of 1.3% is expected for 2019. With an annual inflation of over 50% (the highest level since 1991), the Argentine peso regained volatility and depreciated more than 13% during 2019.
Last Updated: Apr 08, 2019