Europa World: The Europa World Year Book online Routledge -- Taylor & Francis group
 
Regional and International Co-operation Public Holidays

Economic Affairs

Argentina: Economic Affairs

In 2016, according to estimates by the World Bank, Argentina’s gross national income (GNI), measured at average 2014–16 prices, was US $524,532m., equivalent to $11,960 per head (or US $19,480 per head on an international purchasing-power parity basis). During 2007–16, it was estimated, Argentina’s population increased at an average rate of 1.0% per year, while gross domestic product (GDP) per head increased, in real terms, by an average of 0.4% per year. According to official estimates, overall GDP increased, in real terms, at an average annual rate of 1.4% in 2007–16; growth increased by 2.6% in 2015, but declined by a preliminary 2.2% in 2016.

Agriculture (including forestry and fishing) contributed a preliminary 7.5% of GDP in 2016. The sector engaged 6.8% of the total labour force in mid-2015, according to estimates by the United Nations Food and Agriculture Organization. The principal cash crops are wheat, maize, sugar cane and soybeans. Beef production is also important. During 2007–16, according to official preliminary figures, agricultural GDP increased at an average annual rate of less than 0.1%. The sector grew by 7.6% in 2015, but decreased by a preliminary 5.4% in 2016.

Industry (including mining, manufacturing, construction and power) contributed a preliminary 26.7% of GDP in 2016. During 2004–16, according to official preliminary figures, industrial GDP increased, in real terms, at an average annual rate of 0.1%; sectoral GDP grew by 1.5% in 2015, but declined by a preliminary 5.8% in 2016.

Mining contributed a preliminary 4.0% of GDP in 2016. Petroleum reserves totalled 2,395m. barrels in 2016 and production stood at 619,438 barrels per day in the same year. Natural gas production was 38,270m. cu m and proven gas reserves totalled 350,484m. cu m in 2016. According to official government estimates, the GDP of the mining sector declined by 1.3% during 2007–16; the sector’s GDP increased by 2.8% in 2015, but decreased by a preliminary 5.3% in 2016.

Manufacturing contributed a preliminary 16.4% of GDP in 2016. During 2007–16, according to official preliminary figures, manufacturing GDP increased, in real terms, at an average annual rate of 0.2%; manufacturing GDP increased by 0.8% in 2015, but decreased by a preliminary 5.6% in 2016.

The construction sector contributed a preliminary 4.7% of GDP in 2016. During 2007–16, according to official government figures, the GDP of the sector decreased at an average annual rate of 0.4%; construction GDP increased by 3.0% in 2015, but declined by a preliminary 11.0% in 2016.

Energy is derived principally from thermal power (largely fuelled by natural gas), responsible for an estimated 63.7% of national production in 2015. Hydroelectricity accounted for an estimated 24.8% of Argentina’s total energy production in the same year, while the country’s three nuclear power stations produced 5.0% of energy in 2015, according to official sources. Construction of a fourth and fifth nuclear reactor, with Chinese and Canadian funding, was scheduled to begin in 2018.In 2016 imports of mineral fuels comprised a provisional 8.4% of the country’s total imports.

Services accounted for an estimated 65.9% of GDP in 2016. According to official preliminary figures, the GDP of the services sector increased, in real terms, at an average rate of 2.2% per year during 2007–16; sectoral GDP increased by 2.6% in 2015 and decreased by less than 0.1% in 2016.

In 2016 Argentina recorded a visible merchandise trade surplus of US $4,490m., while there was a deficit of $15,024m. on the current account of the balance of payments. In 2016, according to provisional figures, the principal source of imports was Brazil (24.3%), followed by the People’s Republic of China and the USA. Brazil was also the principal recipient of exports, accounting for 15.6% of total exports in that year, followed again by China and the USA. The principal exports in 2016, according to provisional figures, were residues from the food industries and prepared animal feed, followed by cereals, vehicles, oil seeds and oleaginous fruits, and fats and oils. The principal imports in 2016, again according to provisional figures, were vehicles, boilers, machines and mechanical appliances, electrical machinery, and mineral fuels and lubricants.

In 2016 a consolidated general government budgetary surplus of 8,523m. new pesos was forecast. Argentina’s general government gross debt was 4,365,876m. new pesos in 2016, equivalent to 54.2% of GDP. Argentina’s total external debt in 2016 was US $190,490m., of which $101,631m. was public and publicly guaranteed debt. In that year, the cost of servicing long-term public and publicly guaranteed debt and repayments to the International Monetary Fund (IMF) was equivalent to 34.9% of the value of exports of goods, services and income (excluding workers’ remittances). The annual rate of inflation averaged 9.5% in 2004–13, according to government figures, although the real rate was thought by independent sources to be much higher; incoming President Mauricio Macri suspended publication of consumer prices in late 2015 until more reliable official figures could be introduced. The annual rate of inflation in the Buenos Aires metropolitan area was 15.0% in April 2017. According to labour force survey figures, the national unemployment rate was 8.7% in the second quarter of 2017.

The Government of Mauricio Macri that took office in December 2015 faced several economic challenges. Although growth had been steady under Cristina Fernández de Kirchner, the rate of inflation increased, central bank reserves severely depleted and the fiscal deficit widened. The new Government ended the strict capital controls, in place since 2011, in order to allow the peso to float freely against the US dollar. The controls, while steadying foreign exchange markets, had stifled exports and foreign investment. Nevertheless, their removal brought about a 30% devaluation of the peso, leading to further increases in already high consumer prices. Several measures were implemented in an attempt to reduce the fiscal deficit, including the phasing out of energy subsidies, and wage restraints. Exchange controls were also eased and the exchange rate unified. The centre-right Macri Government made resolution of the dispute with the hold-out creditors (see Debt ‘default’ ) a priority in order to gain access international investment: an agreement with the so-called ‘vulture’ fundholders was reached in early 2016. Argentina returned to the international markets with the largest bond issue ever floated by an ‘emerging market economy’. Although inflows of foreign funds grew, the main economic indicators were slow to keep pace: inflation and unemployment remained high, and GDP declined by a preliminary 2.2% in 2016. President Macri took advantage of his party’s increased representation in Congress following the October 2017 mid-term elections to gain approval for business-friendly economic reforms, most notably to the tax, labour and pension systems. The measures were intended to increase competition and investment, as well as boosting employment. An IMF assessment of the economy in December 2017 praised the Macri Government for its progress in reintroducing transparency into official statistics. It also commended progress made in reducing inflation, albeit at a slower rate than originally estimated, and in shrinking the fiscal deficit. However, the Fund warned that austerity measures could reduce spending and thus economic growth. GDP was projected to increase by 2.5% in 2018, according to the IMF, with growth strengthening to by 2.8% in 2019 as the reforms bore fruit.

Citation: Economic Affairs (Argentina), in Europa World online. London, Routledge. Retrieved 22 July 2018 from http://www.europaworld.com/pub/entry/ar.is.57

Regional and International Co-operation Public Holidays


Back to Top




Please note, this site uses web standards that your browser does not support.
See help for further information.