
Economic Overview
Argentina has a long history of political and economic instability - with significant growth fluctuations every year. After two years of recession (–1.6% in 2023, –3.5% in 2024), GDP is projected to grow by 5% in 2025 and 2026 (IMF). Quarterly growth rebounded to 3.4% in Q3/2024, according to a monthly activity indicator. Agriculture, livestock, and mining led the expansion, with manufacturing, construction, and trade also showing strong recoveries. Real credit is increasing. Over the forecast horizon, recovery will be driven by real wage gains, declining inflation, and a stronger labour market, boosting private consumption. Investments will rise with improved confidence and a new preferential regime for large projects. Imports are expected to outpace export growth as domestic demand rebounds. However, delays in planned reforms pose a key downside risk.
The government led by Milei, who took office in December 2023, faces the imperative task of consolidating public finances to stabilize the economy. The authorities are pursuing an economic stabilization program focused on aggressive fiscal adjustment to reverse past BCRA monetary financing, a crawling-peg exchange rate, negative real interest rates to reduce peso liabilities, and maintaining FX controls to support these measures. In 2024, Argentina achieved its first budget surplus in over a decade, totalling ARS 1.76 trillion (0.3% of GDP). The primary fiscal surplus, excluding debt payments, reached ARS 10.41 trillion (1.8% of GDP). In mid-2024, Congress approved a fiscal package lowering the income tax floor and adjusting the personal goods tax, expected to raise revenues by 0.5% of GDP annually. Meanwhile, Milei’s refusal to submit the 2025 budget to Congress has sparked backlash from provincial governors, as he seeks to retain control over public spending amid demands for increased funding for public works and local pensions. The 2025 budget aims for a balanced headline budget and requires automatic spending cuts to cover revenue shortfalls. In line with the deficit reduction, the national debt-to-GDP ratio decreased from 155.4% in 2023 to 91.5% last year and is expected to follow a downward trend, landing at around 68% by 2026 (IMF). Argentina is a country plagued with hyperinflation; however, 2024 showed positive signs, as inflation went down to 117.8, 93.6 points less than in 2023, when prices rose by a record 211.4% (data INDEC).
Despite challenges, the labour market remains resilient, with unemployment standing at 8.2% in 2024, although it increased compared to the previous year (6.1% - IMF). Nonetheless, informality has surged, nearing 40% of the labour force (OECD). The IMF expects the unemployment rate to remain relatively stable over the forecast horizon. 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.
Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
GDP (billions USD) | 645.51 | 604.38 | 574.20 | 611.29 | 647.76 |
GDP (Constant Prices, Annual % Change) | -1.6 | -3.5 | 5.0 | 5.0 | 3.9 |
GDP per Capita (USD) | 13,823 | 12,814 | 12,054 | 12,706 | 13,330 |
General Government Balance (in % of GDP) | -4.9 | 0.5 | 0.7 | 1.2 | 1.2 |
General Government Gross Debt (in % of GDP) | 155.4 | 91.5 | 78.5 | 68.0 | 59.8 |
Inflation Rate (%) | 133.5 | 229.8 | 62.7 | 31.8 | 17.5 |
Unemployment Rate (% of the Labour Force) | 6.1 | 8.2 | 7.6 | 7.2 | 7.0 |
Current Account (billions USD) | -20.96 | 3.58 | 3.23 | 4.69 | 6.67 |
Current Account (in % of GDP) | -3.2 | 0.6 | 0.6 | 0.8 | 1.0 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
See the country risk analysis provided by La Coface.
