The Argentine Economy. A brief sketch of the Argentine economy

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The Argentine Economy. A brief sketch of the Argentine 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 under 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 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. During 2013, the government continued with a mix expansionary fiscal and monetary policies and foreign exchange and imports controls to limit the drain in Central Bank foreign reserves, which nevertheless dropped US $12 billion during the year. GDP grew 3% and inflation remained steady at 25%, according to private estimates. In October 2013, the government settled long-standing international arbitral disputes (including with three US firms) dating back to before and following the 2001-02 Argentine financial crisis. In early 2014, the government embraced some orthodox economic policies. It devalued the peso 20%, substantially tightened monetary and fiscal policies, and took 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 presenting a proposal to pay its arrears to the Paris Club. Nevertheless, the government in July 2014 defaulted again on its external debt after it failed to reach an agreement with US holdout creditors. The government’s delay in reaching a settlement and the continuation of interventionist policies are contributing to a prolonged recession.

GDP (purchasing power parity):

$927.4 billion (2014 est.)

$943.4 billion (2013 est.)

$916.5 billion (2012 est.)

note: data are in 2014 US dollars

country comparison to the world: 26

GDP (official exchange rate):

$536.2 billion (2014 est.)

GDP - real growth rate:

-1.7% (2014 est.)

2.9% (2013 est.)

0.9% (2012 est.)

country comparison to the world: 211

GDP - per capita (PPP):

$22,100 (2014 est.)

$22,700 (2013 est.)

$22,300 (2012 est.)

note: data are in 2013 US dollars

country comparison to the world: 78

Gross national saving:

17.1% of GDP (2014 est.)

17.5% of GDP (2013 est.)

17.1% of GDP (2012 est.)

country comparison to the world: 101

GDP - composition, by end use:

household consumption: 66.9%

government consumption: 16.3%

investment in fixed capital: 15.9%

investment in inventories: 1.4%

exports of goods and services: 16%

imports of goods and services: -16.6%

(2014 est.)

GDP - composition, by sector of origin:

agriculture: 10.4%

industry: 29.5%

services: 60.1% (2014 est.)

Agriculture - products:

sunflower seeds, lemons, soybeans, grapes, corn, tobacco, peanuts, tea, wheat; livestock

Industries:

food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel

Industrial production growth rate:

-2.1%

note: based on private sector estimates (2014 est.)

country comparison to the world: 186

Labor force:

17.31 million

note: urban areas only (2014 est.)

country comparison to the world: 36

Labor force - by occupation:

agriculture: 5%

industry: 23%

services: 72% (2009 est.)

Unemployment rate:

7.7% (2014 est.)

7.1% (2013 est.)

country comparison to the world: 85

Population below poverty line:

30%

note: data are based on private estimates (2010)

Household income or consumption by percentage share:

lowest 10%: 1.5%

highest 10%: 32.3% (2010 est.)

Distribution of family income - Gini index:

45.8 (2009)

country comparison to the world: 34

Budget:

revenues: $117.2 billion

expenditures: $130.5 billion (2014 est.)

Taxes and other revenues:

21.9% of GDP (2014 est.)

country comparison to the world: 147

Budget surplus (+) or deficit (-):

-2.5% of GDP (2014 est.)

country comparison to the world: 96

Public debt:

37.9% of GDP (2014 est.)

39.5% of GDP (2013 est.)

country comparison to the world: 101

Fiscal year:

calendar year

Inflation rate (consumer prices):

36.4% (2014 est.)

20.7% (2013 est.)

note: data are derived from private estimates

Central bank discount rate:

NA%

Commercial bank prime lending rate:

25.5% (31 December 2014 est.)

17.15% (31 December 2013 est.)

country comparison to the world: 7

Stock of narrow money:

$54.13 billion (31 December 2014 est.)

$62.53 billion (31 December 2013 est.)

country comparison to the world: 47

Stock of broad money:

$120.8 billion (31 December 2014 est.)

$139.7 billion (31 December 2013 est.)

country comparison to the world: 50

Stock of domestic credit:

$156 billion (31 December 2014 est.)

$168.1 billion (31 December 2013 est.)

country comparison to the world: 47

Market value of publicly traded shares:

$34.24 billion (31 December 2012 est.)

$43.58 billion (31 December 2011)

$63.91 billion (31 December 2010 est.)

country comparison to the world: 58

Current account balance:

-$4.57 billion (2014 est.)

-$4.635 billion (2013 est.)

country comparison to the world: 167

Exports:

$76.47 billion (2014 est.)

$81.53 billion (2013 est.)

country comparison to the world: 49

Exports - commodities:

soybeans and derivatives, petroleum and gas, vehicles, corn, wheat

Exports - partners:

Brazil 21%, China 7.1%, US 5.5%, Chile 4.6% (2013)

Imports:

$65.9 billion (2014 est.)

$70.54 billion (2013 est.)

country comparison to the world: 46

Imports - commodities:

machinery, motor vehicles, petroleum and natural gas, organic chemicals, plastics

Imports - partners:

Brazil 27.8%, US 14.5%, China 12.4%, Germany 4.6% (2013)

Reserves of foreign exchange and gold:

$26.6 billion (31 December 2014 est.)

$30.53 billion (31 December 2013 est.)

country comparison to the world: 54

Debt - external:

$115.7 billion (31 December 2014 est.)

$118.7 billion (31 December 2013 est.)

country comparison to the world: 45

Stock of direct foreign investment - at home:

$116.7 billion (31 December 2014 est.)

$109.9 billion (31 December 2013 est.)

country comparison to the world: 40

Stock of direct foreign investment - abroad:

$35.98 billion (31 December 2014 est.)

$34.33 billion (31 December 2013 est.)

country comparison to the world: 43

Exchange rates:

Argentine pesos (ARS) per US dollar -

8.22 (2014 est.)

5.46 (2013 est.)

4.54 (2012 est.)

4.11 (2011 est.)

3.9 (2010 est.)