With a Gross Domestic Product (GDP) of approximately US$610 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, it 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, it has significant opportunities in some manufacturing subsectors, and innovative services in high tech industries.
After the pandemic, economic activity has recovered faster than expected, with an increase of 10.4% of GDP in 2021 and 5.2% in 2022, after a fall of 9.9% in 2020 in the context of the crisis unleashed by COVID-19. However, economic activity has contracted in the last 4 months of 2022, affected by strict import controls to sustain the accumulation of reserves, while a historic drought limits growth in 2023. Inflation remains high, and as of February 2023, it exceeded a 100% per year. The economy continues to show macroeconomic imbalances that limit the sustainability of economic growth.
After the transfer of private debt in 2020, an agreement was reached with the International Monetary Fund in early 2022 for a new Extended Fund Facility (EFF). With a duration of 30 months and a four-and-a-half-year grace period, this program allows the country to postpone its maturities with the agency and strengthen its reserves in the short term. Among the commitments is the gradual fiscal consolidation - reaching equilibrium in 2025 - together with the reduction of monetary financing of the deficit. In its first year, fiscal deficit was reduced in comparison to 2021, reaching the agreed goals mainly because of the effect of inflation on public spending and the application of a tariff segmentation scheme.
Last Updated: Apr 03, 2023