With a Gross Domestic Product (GDP) of more than US$628 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.
Argentina was the top performer in the region in reducing poverty and boosting shared prosperity between 2004 and 2008. Incomes of the bottom 40% grew at an annualized rate of 11.8% compared to average income growth of 7.6%. This trend continued but slowed after 2008. In the first half of 2018, according to official statistics, 27.3% lived in poverty, while 4.9% were in extreme poverty.
The country 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.
Presidential elections at the end of 2015 led to a significant change in Argentine economic policy. 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 is in charge of the presidency of the G20 in 2018, expressed intention to join the OECD and became an observer in the Pacific Alliance.
After an economic growth of 2.9% in 2017, the country is facing a financial turmoil in 2018. Economic activity began to slow down in the second quarter of 2018 and the year is expected to end with a recession. The Argentine peso has suffered a depreciation since April and fell close to 100% against the dollar so far this year. As a result, inflation accelerated since June and is expected to accelerate more during the year.
This situation led the Government to launch a new economic program that includes a budget cut, an increase in revenues, and a US$57 billion agreement with the International Monetary Fund (IMF) until 2021. until 2021.
In this context, the Government exceeded its fiscal objectives for the first half of 2018. The primary fiscal deficit reached 1.1% of GDP in the first eight months of 2018, and it is expected to reach the target of 2.7% of the GDP for 2018. The Government plans to achieve the primary fiscal balance by 2019 and a primary fiscal surplus of 1% by 2020.
lastupdated: Oct 10, 2018