Argentina: Economy#

Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. Although one of the world's wealthiest countries 100 years ago, Argentina suffered during most of the 20th century from recurring economic crises, persistent fiscal and current account deficits, high inflation, mounting external debt, and capital flight.

A severe depression, growing public and external indebtedness, and an unprecedented bank run culminated in 2001 in the most serious economic, social, and political crisis in the country's turbulent history. Interim President Adolfo RODRIGUEZ SAA declared a default - at the time the largest ever - on the government's foreign debt in December of that year, and abruptly resigned only a few days after taking office. His successor, Eduardo DUHALDE, announced an end to the peso's decade-long 1-to-1 peg to the US dollar in early 2002. The economy bottomed out that year, with real GDP 18% smaller than in 1998 and almost 60% of Argentines below the poverty line. Real GDP rebounded to grow by an average 8.5% annually over the subsequent six years, taking advantage of previously idled industrial capacity and labor, an audacious debt restructuring and reduced debt burden, excellent international financial conditions, and expansionary monetary and fiscal policies. Inflation also increased, however, during the administration of President Nestor KIRCHNER, which responded with price restraints on businesses, as well as export taxes and restraints, and beginning in 2007, with understating inflation data.

Cristina FERNANDEZ DE KIRCHNER succeeded her husband as president in late 2007, and the rapid economic growth of previous years began to slow sharply the following year as government policies held back exports and the world economy fell into recession. The economy in 2010 rebounded strongly from the 2009 recession, but has slowed since late 2011 even as the government continued to rely on expansionary fiscal and monetary policies, which have kept inflation in the double digits.

The government has taken multiple steps in recent years to deal with these problems. It expanded state intervention in the economy throughout 2012. In May 2012 the Congress approved the nationalization of the oil company YPF from Spain's Repsol. The government expanded formal and informal measures to restrict imports during the year, including a requirement for pre-registration and pre-approval of all imports. In July 2012, the government also further tightened currency controls in an effort to bolster foreign reserves and stem capital flight. In October 2013, the government settled long standing international arbitral disputes dating to before and following the 2001 Argentine financial crisis. During 2014, the government continued its expansionary fiscal and monetary policies and foreign exchange and imports controls. Between 2011 and 2013, Central Bank foreign reserves had dropped $21.3 billion from a high of $52.7 billion. In July 2014, Argentina and China agreed on an $11 billion currency swap; the Argentine Central Bank has received the equivalent of $3.2 billion in Chinese yuan, which it counts as international reserves.

In 2014, the government also took some measures to mend ties with the international financial community, including engaging with the IMF to improve its economic data reporting, reaching a compensation agreement with Repsol for the expropriation of YPF, and agreeing to pay $9.7 billion in arrears to the Paris Club over five years, including $606 million owed to the US. In July 2014, Argentina made its first payment to Paris Club creditors. At the same time, the Argentine Government in July 2014 entered a technical default on its external debt after it failed to reach an agreement with holdout creditors in the US. The FERNANDEZ DE KIRCHNER government rejected repeated attempts by the court to encourage a negotiated solution with holdouts. Throughout much of 2015, negotiations to repay holdout creditors stalled. The government’s delay in reaching a settlement and the continuation of interventionist policies contributed to high inflation and a prolonged recession.

After being elected into office on December 10, President MACRI has taken significant steps to liberalize the Argentine economy. His administration lifted capital controls; floated the peso, negotiated debt payments with holdout bond creditors, and removed export controls on some commodities.

Economic Facts#

GDP (purchasing power parity)$879.4 billion (2016 est.)
$895.2 billion (2015 est.)
$873.7 billion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$541.7 billion (2015 est.)
GDP - real growth rate-1.8% (2016 est.)
2.5% (2015 est.)
-2.5% (2014 est.)
GDP - per capita (PPP)$20,200 (2016 est.)
$20,800 (2015 est.)
$20,500 (2014 est.)
note: data are in 2016 dollars
Gross national saving14.2% of GDP (2016 est.)
14.3% of GDP (2015 est.)
15.8% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 63.7%
government consumption: 19.3%
investment in fixed capital: 16%
investment in inventories: 1.7%
exports of goods and services: 13.2%
imports of goods and services: -13.9% (2016 est.)
GDP - composition, by sector of originagriculture: 11.4%
industry: 30.2%
services: 58.4% (2016 est.)
Agriculture - productssunflower seeds, lemons, soybeans, grapes, corn, tobacco, peanuts, tea, wheat; livestock
Industriesfood processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel
Industrial production growth rate1.7%
note: based on private sector estimates (2016 est.)
Labor force17.71 million
note: urban areas only (2016 est.)
Labor force - by occupationagriculture: 5%
industry: 23%
services: 72% (2009 est.)
Unemployment rate8% (2016 est.)
7.6% (2015 est.)
Population below poverty line30%
note: data are based on private estimates (2010 est.)
Household income or consumption by percentage sharelowest 10%: 1.5%
highest 10%: 32.3% (2010 est.)
Distribution of family income - Gini index45.8 (2009)
Budgetrevenues: $115.9 billion
expenditures: $141.7 billion (2016 est.)
Taxes and other revenues21.4% of GDP (2016 est.)
Budget surplus (+) or deficit (-)-4.8% of GDP (2016 est.)
Public debt53.8% of GDP (2016 est.)
50.1% of GDP (2015 est.)
Fiscal yearcalendar year
Inflation rate (consumer prices)42.8% (2016 est.)
26.5% (2015 est.)
note: data are derived from private estimates
Central bank discount rateNA%
Commercial bank prime lending rate32.3% (31 December 2016 est.)
24.92% (31 December 2015 est.)
Stock of narrow money$54.2 billion (31 December 2016 est.)
$52.3 billion (31 December 2015 est.)
Stock of broad money$150.3 billion (31 December 2015 est.)
$138.6 billion (31 December 2014 est.)
Stock of domestic credit$200.8 billion (31 December 2016 est.)
$182.2 billion (31 December 2015 est.)
Market value of publicly traded shares$56.13 billion (31 December 2015 est.)
$60.14 billion (31 December 2014 est.)
$53.1 billion (31 December 2013 est.)
Current account balance-$12.72 billion (2016 est.)
-$15.94 billion (2015 est.)
Exports$58.4 billion (2016 est.)
$56.76 billion (2015 est.)
Exports - commoditiessoybeans and derivatives, petroleum and gas, vehicles, corn, wheat
Exports - partnersBrazil 17%, China 8.6%, US 5.9% (2015)
Imports$57.23 billion (2016 est.)
$57.18 billion (2015 est.)
Imports - commoditiesmachinery, motor vehicles, petroleum and natural gas, organic chemicals, plastics
Imports - partnersBrazil 22.4%, US 16.3%, China 15.5%, Germany 5.1% (2015)
Reserves of foreign exchange and gold$32.11 billion (31 December 2016 est.)
$25.52 billion (31 December 2015 est.)
Debt - external$155.1 billion (31 December 2016 est.)
$136.1 billion (31 December 2015 est.)
Stock of direct foreign investment - at home$103.7 billion (31 December 2016 est.)
$94.19 billion (31 December 2015 est.)
Stock of direct foreign investment - abroad$37.97 billion (31 December 2016 est.)
$37.03 billion (31 December 2015 est.)
Exchange ratesArgentine pesos (ARS) per US dollar -
14.92 (2016 est.)
9.2332 (2015 est.)
9.2332 (2014 est.)
8.0753 (2013 est.)
4.54 (2012 est.)