The World Bank in Argentina

With a Gross Domestic Product (GDP) of approximately US$650 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.

While Argentina’s economy expanded by 5% in 2022, the impact of a devastating drought is expected to result in a 2.5% negative growth in 2023. Growth is expected to accelerate in 2024, due to improved climatic conditions, continued historically high soybean prices and investments in the energy sector that will allow the country to reduce gas imports and improve external accounts.

The severe drought has deteriorated economic conditions and further amplified preexisting macro imbalances. Annual inflation accelerated in 2023, reaching 124 percent in August, affecting marginalized segments of the population. According to national statistics published in September 2023, poverty stands at 40.1% and extreme poverty stands at 9.1%..

Argentina is currently (since early 2022) under a 30-months Extended Fund Facility (EFF) with the International Monetary Fund (IMF). By end-August 2023 the IMF Executive Board completed the combined fifth and six review of the program, granting Argentina access to about US$7.5bn. Key program targets were missed through end-June 2023 on account of the historic drought. Modifications to the reserve accumulation target, as well as to the (nominal) primary fiscal balance and monetary financing of the deficit targets, were also approved alongside a commitment to implement a new policy package to correct policy setbacks, safeguard stability, and secure program objectives.

Last Updated: Oct 02, 2023

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 28 investment projects with US$8.92 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: Oct 02, 2023