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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Argentina has a long history of political and economic instability - with significant growth fluctuations every year. In 2021, the country had an estimated growth in GDP of 7.5%, mainly driven by the recovery of investments and private consumption, as well as the vigour shown by exports favoured by the high prices of commodities. South America’s second largest economy is expected to continue to recover in the coming years, albeit at a slower pace, with the IMF predicting a GDP growth of 2.5% for 2022 and 2% for 2023.

Since 1950, Argentina has spent 33% of the time in recession, second in the world behind the Democratic Republic of Congo, according to the World Bank. The country's structurally high inflation increased in 2021 and hit an estimated 52.1%, according to the National Institute of Statistics and Censuses, in part because a large share of the fiscal deficit is monetised. In order to curb inflationary pressures, the Central Bank has kept the pace of currency depreciation below inflation in 2021. According to the IMF, general government balance in Argentina represented an estimated 0.7% of GDP, while public debt reached 104.5% in 2021. Furthermore, the country has been making progress in its US$40-billion debt renegotiation with the IMF, although an agreement is yet to be reached. Although the pandemic has significantly impacted the Argentine economy, the country has begun to recover. In 2021, the government continued implementing measures to counteract the economic crisis resulting from the pandemic, which included increased health spending, financial support for workers and vulnerable groups, price controls for food and medical supplies, and credit guarantees for bank lending to SMEs for the production of foods and basic supplies. Based on the government’s estimates, these measures added up to 2.1% of GDP in 2021 and are expected to total about 0.9% of GDP in 2022.

In 2021, the unemployment rate in Argentina fell to an estimated 10%, consistent with the economic recovery the country experienced. That downward trend is expected to continue in 2022 and 2023, when unemployment rates should reach 9.2%. However, even though formal employment has been rising, high labour informality remains a concern in the country. The Argentine government has faced difficulties in fighting high levels of poverty, which affects more than 40% of the population, and the social situation of the country is characterised by constant underlying tensions between the Government and trade unions over the reforms announced. The country is also split between central and decentralised authorities over the distribution of federal revenues. Infrastructure net works require more investment as access to electricity and water in rural areas is not always ensured.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 451.82e389.06e455.17483.77476.49
GDP (Constant Prices, Annual % Change) -2.1-9.9e10.03.02.5
GDP per Capita (USD) 10,0548,572e9,92910,44810,189
General Government Balance (in % of GDP) -3.0-5.7e0.00.00.0
General Government Gross Debt (in % of GDP) 88.7102.80.00.00.0
Inflation Rate (%) 53.542.00.00.00.0
Unemployment Rate (% of the Labour Force) 9.811.6e10.09.29.2
Current Account (billions USD) -3.713.31e4.533.733.98
Current Account (in % of GDP) -0.80.91.00.80.8

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Despite recent economic struggles, Argentina continues to play an important role within the global economy, especially with regards to its agricultural production. The sector is mainly based on livestock farming, cereal cultivation (wheat, corn and transgenic soy), citrus fruits, tobacco, tea and grapes (mostly for the production of wine). Argentina is the world’s largest exporter of soy-derived products and the world’s third largest producer of such products. Soy and sugar cane are extensively cultivated for bio-fuel production. As a result, the country is the world’s largest exporter and sixth largest producer of bio-diesel. The agricultural sector represents 5.9% of the country’s GDP, but it only employs 0.06% of the population (World Bank figures for 2020 and 2019, respectively). Additionally, given that the country is rich in energy resources, Argentina also has a great potential in terms of raw materials: it is the fourth largest natural gas producer in Latin America, and they have the world's third largest shale gas reserve and the fourth largest lithium reserve. Agricultural exports are a key source of revenue for Argentina, especially as the country leaves a recession that has been exacerbated by the pandemic. In 2021, the country benefited from the high prices of agricultural commodities, with grain exports performing particularly well and reaching a record high.

The industrial sector has vastly expanded in recent years. According to the latest data from the World Bank, the sector represented 23.3% of GDP in 2020 and employed 21.8% of the population in 2019. Food processing and packaging - in particular meat packing, flour grinding and canning - and flour-milling are the country's main industries. The industrial sector also demonstrates strength in motor vehicles and auto parts, consumer durables, textiles, chemicals and petrochemicals, pharmaceuticals, printing, metallurgy and steel, industrial and farm machinery; electronics and home appliances. Industrial activity in Argentina registered a significant growth in 2021, with the greatest recovery being registered in the automotive industry, metallurgy and steel, construction materials, petroleum refining, and production of food and beverages. The measures adopted by the government to encourage consumption following the pandemic boosted expenditure of non-durable goods in 2021, while durable goods saw an increase in consumption as a result of inflation, as they are seen as a store of value in the face of the deterioration of the Argentine Peso.

The service sector is the largest contributor to GDP, accounting for 54.6%, and it employs 78.1% of the active workforce. Argentina has specialised in areas of high-tech services and is highly competitive in software development, call centres, nuclear energy and tourism. The telephone and ITC sectors are also developing dynamically, as well as tourism, which is increasingly becoming an important sector. However, that was one of the most affected sectors during the pandemic, as the number of tourists greatly decreased. To overturn that and to lighten the impact of tourism on inflation, the Argentine government put a lock on the prices of goods and services associated with tourism in 2021, such as hotels, airlines and restaurants.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 0.1 21.8 78.1
Value Added (in % of GDP) 6.8 22.5 54.3
Value Added (Annual % Change) -7.5 -9.4 -10.5

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Argentine Peso (ARS) - Average Annual Exchange Rate For 1 USD 14.7616.5628.0948.1070.54

Source: World Bank - Latest available data.

 

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Foreign Trade

Argentina has been a relatively closed market to international trade, which accounted for 30.5% of its GDP in 2020 (World Bank). Nevertheless, the government has been trying to reduce protectionism and president Fernández is seeking a mature relationship with China and the US. The country's main exports include oil-cake and other solid residues (13.7%), maize (11%), soy-bean oil and soya beans (10.8%), meat (3.8%), and wheat and meslin (3.7%); while it imports soya beans (4.7%), auto parts and accessories (3.9%), motor cars and other motor vehicles (3.8%), electrical apparatus for line telephony (3.4%), and petroleum gas and other gaseous hydrocarbons (2.8%). According to IMF Foreign Trade Forecasts, the volume of exports of goods and services increased by 6.7% in 2021 and is expected to remain stable at 6.8% in 2022, while the volume of imports of goods and services increased by 23.2% in 2021 and is expected to decrease to 3% in 2022.

As part of the Mercosur, Brazil is Argentina’s main trade partner for both exports and imports, followed by China, the United States, Germany, Chile, Paraguay, Vietnam, and Germany. Even though Brazil has been Argentina's biggest partner for years, their relationship has been deteriorating since the election of Bolsonaro’s ideological opposite, Alberto Fernandez. Additionally, Mercosur is facing a fragile state, with a weak institutional structure and ideological differences between its members. With plans of changing its rules, Argentina could possibility delay opening up its economy to bilateral deals, while the rest of the members take the opposite path.

According to the last available data from WTO, Argentina exported USD 54.8 billion worth of goods in 2020, and imported USD 42.3 billion. As for services, the country imported USD 11.6 billion and exported USD 9.2 million. Overall, imports declined 18.1% compared to the previous year, while exports decreased 17.7%, resulting on an overall trade balance of USD 14.4 billion.

 
Foreign Trade Values 20162017201820192020
Imports of Goods (million USD) 55,60966,93065,48249,12442,354
Exports of Goods (million USD) 57,73758,62261,78165,11654,884
Imports of Services (million USD) 19,67924,66424,01419,15111,604
Exports of Services (million USD) 12,69714,52015,05713,9429,237

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20162017201820192020
Foreign Trade (in % of GDP) 26.125.331.232.630.5
Trade Balance (million USD) 4,416-5,447-74318,22714,413
Trade Balance (Including Service) (million USD) -4,035-15,143-9,70913,01212,045
Imports of Goods and Services (Annual % Change) 5.815.6-4.5-19.0-18.1
Exports of Goods and Services (Annual % Change) 5.32.60.59.0-17.7
Imports of Goods and Services (in % of GDP) 13.614.016.615.213.9
Exports of Goods and Services (in % of GDP) 12.511.314.617.416.6

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20212022 (e)2023 (e)2024 (e)2025 (e)
Volume of exports of goods and services (Annual % change) 6.86.85.74.73.7
Volume of imports of goods and services (Annual % change) 23.23.03.03.83.7

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Argentina is a member of the following international economic organisations: Latin American and the Caribbean Economic System, WTO, Mercosur, IMF, G-15, G-20, G-24, G-77, ICC, among others. For the full list of economic and other international organisations in which participates Argentina click here. International organisation membership of Argentina is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Argentina can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2020
Brazil 14.5%
China 9.6%
United States 6.0%
Chile 5.3%
Vietnam 5.2%
See More Countries 59.5%
Main Suppliers
(% of Imports)
2020
China 20.4%
Brazil 20.4%
United States 10.4%
Paraguay 5.2%
Germany 4.7%
See More Countries 38.8%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Alberto Fernández (since 10 December 2019); the president is both chief of state and head of government.
Next Election Dates
President: October 2023
Legislative (Senate and Chamber of Deputies): October 2023
Current Political Context
President Alberto Fernández, who took office in December 2019, was elected on pledges to resurrect the Argentinian economy after a long period of economic downturns. However, the negative economic and social impacts of the pandemic and the setbacks in the reopening process resulted in a significant fall in popularity. In 2021, the moderate stance of the government gave way to the hardliner and interventionist orientation linked to Vice-President Cristina Kirchner. As a result, at the lesgilative elections, which took place in November 2021, Argentina's ruling Peronist party saw its centre-left coalition lose its majority in Congress for the first time in almost 40 years. In 2022, the Congress will have to approve a debt agreement with IMF. However, as the IMF is not a popular institution among Argentines, the deal can further decrease the president's popularity. Nevertheless, the deal will provide investors with legal and macroeconomic certainty, which is a big step in returning to meaningful growth and a significant part of the president's strategy to attract new investment while dealing with Argentina’s debt problem and addressing other issues such as inflation, poverty, and unemployment.
Main Political Parties
- Everyone's Front (Frente de Todos): coalition which aims to create a union of all parties of centre-left and left-wing, peronism, kirchnerism, social democracy, democratic socialism, and progressivism
- Together For Change (JxC): formerly known as Cambiemos. Centre-left to centre-right, big-tent coalition, liberalism, conservatism, social democracy, federal peronism, and Christian democracy
- Federal Consensus (Consenso Federal): centre political coalition, federal peronism, and progressivism
- Workers' Left Front (FIT): far-left alliance, ideologically identifies with Trotskyism
- Advance Freedom (Avanza Libertad): centre-right coalition, economic liberalism, social conservatism
- We (NOS): right-wing coalition, Catholic nationalism, conservatism, right-wing populism
Executive Power
Executive power is held by the President of the Argentine nation and is his/her responsibility to respond to national interests. The President is the Head of the Government and the Chief of State, the individual responsible for the general administration of the country and Commander-in-Chief of the Armed Forces. The President is elected by universal suffrage for a four-year term and can be re-elected for a subsequent consecutive term of office. The Vice President is elected alongside the President. The President appoints individuals to the Council of Ministers.

Argentina has 23 provinces and one autonomous federal district - each retains some powers that do not belong to the federal government and elects their own legislators and provincial governors.

Legislative Power
The legislative power is held by the bicameral National Congress (Congreso Nacional). The Chamber of Deputies (the lower house) is comprised of 257 members, which are elected to four-year terms by direct universal suffrage, with half of the membership renewed every two years. The Senate (upper house) is comprised of 72 members, which are elected to six-year terms by direct universal suffrage - with one third of the members elected every two years.
 

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COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Argentina, please visit the Argentine government platform with the official data. Official information on the progress of the epidemic in Argentina is consolidated by the Ministry of Health (in Spanish). The ministry provides a daily epidemiological update, which includes key national figures.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Argentina and the current sanitary measures in vigour, please consult the Argentine government informative portal on COVID-19 including the up-to-date information on the containment measures put in place and public health recommendations.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the Argentine Ministry of Economy.

For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Argentina on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan
For the information on the economic recovery scheme put in place by the Argentine government to address the impact of the COVID-19 pandemic on the Argentine economy, please visit the website of the Ministry of the Economy. The information on the Argentine economic emergency plan is available here.

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Argentine government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Argentina in the IMF’s Policy Tracker platform.

Support plan for businesses
For the information on the local business support scheme established by the Argentine government to help small and medium-sized companies to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the measures for SMEs established by the Argentine Ministry of Productive Development. For an overview of the measures taken for the tourist sector, refer to the dedicated page on the Argentine government platform (in Spanish).
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.
Support plan for exporters
To find out about the support plan for exporters put in place by the Argentine government, please consult the support plan for Argentine exporting companies available on the Argentine Ministry of the Economy website. Further information on the latest plans for Argentine exports is available on the Argentine Agency for Investments and International Trade website.
 

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