The World Bank in Argentina

With a Gross Domestic Product (GDP) of approximately US$640 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, gas, and lithium reserves, and has great potential for renewable energy. Argentina 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. 

The economy contracted by 1.6 percent in 2023, due to persistent macroeconomic imbalances and a severe drought that led to a 26 percent decline in agricultural production over the year. 

Real GDP is estimated to contract by an additional 2.8 percent in 2024, due to the stabilization plan being implemented by the new government, which includes the realignment of relative prices and the elimination of fiscal and external imbalances. The economy is expected to grow by 5 percent in 2025, driven by improved weather conditions, investments in the energy sector, and the normalization of agricultural production.   

Inflation rose sharply in December 2023, driven by the effect of a devaluation of the official exchange rate and the removal of price controls. Month-over-month inflation peaked at 25.5 percent in December, declining to 13.2 percent by February. The government implemented social protection measures that included doubling in nominal terms the main social programs (universal child allowance and food support) and extraordinary bonuses for low-income retirees. Although social assistance is well targeted, the real value of social benefits, including pensions and social transfers, has fallen by 30 percent year-on-year by February 2024. 

Argentina is under a 30-months Extended Fund Facility (EFF) with the International Monetary Fund (IMF). In January 2024, the IMF Executive Board completed the seventh review of the program. In line with the government's new program, the EFF is focused on implementing a sound fiscal consolidation plan with the objective of achieving a primary surplus of 2 percent of GDP by 2024. This fiscal consolidation plan, coupled with a supportive monetary stance to combat inflation and simplification of the foreign exchange (FX) regime, is expected to result in an accumulation of approximately $10 billion in net international reserves by the end of 2024.   

The stabilization program implemented by the new administration has yielded fiscal results. In January and February 2024, Argentina ran fiscal surpluses for the first time in many years. Inflation is also starting to come down, but it remains at high levels. Country risk has also fallen, from 2,100 points in January to 1,432 in March 2024. However, it remains one of the highest in the region.

Last Updated: Apr 02, 2024

The World Bank is a long-term strategic partner of Argentina. The Country Partnership Framework (CPF) for 2019-2022 seeks to contribute to reducing poverty through promoting sustainable and inclusive growth. A review of the CPF was carried out in 2022, which lead to a redesign of some of the objectives due to the outbreak of the Covid-19 pandemic.

The main areas of work are:

1. Supporting inclusive recovery

The focus of this area is recovering from the current crisis and setting the foundations for inclusive growth, as well as creating the conditions for private job creation and investment. This area also supports improving effectiveness of public policies and investments, enhancing urban mobility to provide safe and inclusive access to jobs, improving living conditions, improving access to financing – with a focus on small and medium enterprises and marginalized groups – and providing analytical support to prioritize public investments, focus social protection measures, and, to reform tariffs and subsidies for fiscal impact while protecting the poor.

2. Strengthening service delivery to protect the poor and vulnerable

Strengthening service delivery to protect the poor and vulnerable is another key area of the strategy. Moreover, it prioritizes the education sector, with the aim of improving learning outcomes in secondary education and skills building capacity to enter the labor market. It continues also to support the implementation of a universal healthcare coverage system in the provinces.

Enhancing the efficiency of public administration is another key area. It will do so by seeking to strengthen inter-jurisdictional coordination with the goal of improving basic public service delivery such as water and sanitation.

3. Supporting climate measures and long-term sustainable growth

The main objectives of this area are transitioning to a cleaner energy matrix, making the rural economy more climate smart, and supporting a resilient economy. This key area involves reducing local pollution, managing, and protecting natural resources and biodiversity, and building a more sustainable economy.

Last Updated: Oct 02, 2023

Argentina has an active portfolio of 26 investment projects with US$8.4 billion in committed loans. The portfolio focuses on supporting programs in the areas of health, environment, education, infrastructure, labor market and social protection.

During 2023, the World Bank Board of Directors approved several projects, among which are:

1. A US$200 million project to provide financing for more than 14,000 MSMEs and support them as they face climate risks and improve their ability to compete in green markets.
2. A US$450 million project to increase the effectiveness of food programs.
3. A US$ 50 million to improve access to public healthcare services in the province of Buenos Aires.
4. A US$400 million project to expand access to clean energy and promote energy efficiency in vulnerable households and communities.
5. A US$300 million loan to improve quality and coverage of health services.
6. A US$200 million project to reduce flood risks in cities around the country.
7. A US$300 million loan to reduce dropout rates in secondary and higher education.
8. A US$150 million loan to support planned urban growth to enable more inclusive housing access.

In addition, in November 2022, the World Bank published the Climate and Development Report (CCDR) that identifies opportunities to strengthen resilience and decarbonize the economy by 2050.

This report adds to a series of analytical studies that the World Bank carries out to help achieve sustained poverty reduction in Argentina. Other recent reports focus on topics such as agriculture, environment, pensions, subsidies, and cities, among others.

Last Updated: Apr 02, 2024