About Argentina and Key Financial Statistics

About Argentina and Key Financial Statistics

Overview of 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 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 back to before and following the 2001 Argentine financial crisis. During 2014, the government continued with 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 United States. In July 2014, Argentina made its first payment to Paris Club creditors since the country's 2001 financial crisis. 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 government's delay in reaching a settlement and the continuation of interventionist and populist policies are contributing to high inflation and a prolonged recession, according to private analysts.

Gross Domestic Product (In USD):

$951 billion (2014 est.)

$946.6 billion (2013 est.)

$920.1 billion (2012 est.)

Composition of Gross Domestic Product:

% Agricuture: 10.2

% Industry: 29.5

% Services: 60.3

Composition of Labor Force by Occupation:

% Agriculture: 5

% Industry: 23

% Services: 72

Per Capita Income:

$22,300 (2014 est.)

$22,200 (2013 est.)

$21,600 (2012 est.)

Exports:

$71.93 billion (2014 est.)

$81.67 billion (2013 est.)

Key Export Commodities:

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

Export Partners:

Brazil 20.3%, China 6.9%, US 5.5% (2014)

Imports:

$62.45 billion (2014 est.)

$70.54 billion (2013 est.)

Key Import Commodities:

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

Import Partners:

Brazil 23.7%, US 17.9%, China 12.7%, Germany 5.1%, Bolivia 4.2% (2014)

Inflation Rate (Consumer Price Index):

37.6% (2014 est.)

10.6% (2013 est.)

Exchange Rate to USD:

Argentine pesos (ARS) per US dollar -

8.08 (2014 est.)

8.08 (2013 est.)

4.54 (2012 est.)

4.11 (2011 est.)

3.9 (2010 est.)

Unemployment Rate:

7.3% (2014 est.)

7.1% (2013 est.)

S&P Rating:

Standard & Poor's Ratings:

• • AAA: The best quality borrowers, reliable and stable

  • AA: Quality borrowers, a bit higher risk than AAA

  • A: Economic situation can affect finance

  • BBB: Medium class borrowers, which are satisfactory at the moment

  • BB: More prone to changes in the economy

  • B: Financial situation varies noticeably

  • CCC: An obligor rated currently vulnerable, and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments.

Ref 2012-2014: CIA World Factbook, Wikipedia, PWC, EY, Standard & Poors ratings