Economic trends
After the severe recession, which lead to the Argentinian bankruptcy in 2001-2002, the economy saw a rapid and stable growth of 8% on average. Hit by the global financial cirisis of 2009 (0.9% growth), the Argentinian economy experienced fast and dynamic growth in 2010, together with the rest of the South-American continent. In 2011, the growth (8%) was driven by good performance of the exports, benefiting from a surge in grain prices.
President Cristina Fernandez de Kirchner was re-elected in the first round in October 2011, for a four-year term. She will pursue expansionary economic policy, which contributed to a rapid GDP growth, but also led to growing imbalances, inflationary pressures and a deteriorating public finance management. The government responded to this situation by a resurgence of protectionism (price controls and trade), by offering a 45% reduction in imports by 2020 to promote local industries. This would also ensure a trade surplus, the only way for Argentina to obtain foreign exchange, while the country still has a debt with the Paris Club (8 billion USD). The main challenges are the fight against inflation and capital flight. Moreover, the financial system remains fragile and the country faces an energy crisis due to lack of investment in this sector.
The social situation of the country is sensitive: unemployment (7%) and malnutrition persist, with25% of the population living under the poverty line. 30% of workers are employed by the informal economy. According to the official numbers, 2 million are living in poverty - according to private studies, the real number is five times higher.
Main branches of industry
Having lost the position of a superpower it occupied at the beginning of the 20th century, Argentina remains an important world economy, namely due to its agricultural production. The agricultural sector, which is based livestock farming, cultivation of cereals (wheat, corn, soy) and citrus fruit, represents around 10% of the country’s GDP. On the global level, Argentina is the largest exporter of soy-derived products and the third largest producer.
Rich in energy resources, Argentina is the world’s fourth largest oil producer and first largest natural gas producer in Latin America.
The industry sector has vastly expanded over these last few years. It contributes to more than one third of the GDP. Food packaging (in particular meat packing, flour grinding, and canning) and flour-milling are the country's main industries.
The services sector followed the same trend as the industry sector. Today, it contributes to more than half of the GDP. Argentina has specialized in areas of high-tech services and offers excellent value for money specifically in software development, call centers and nuclear energy.
International trade
Argentina is very open to international exchanges, foreign trade represening around 40% of the GDP (average 2008-2010). Its main commercial partners are the Mercosur countries (Brazil, Paraguay and Uruguay), China and the United States. Argentina exports more than it imports and its trade balance is therefore in surplus. In 2011, the trade balance was reduced by 11%, exports increased by 24% while imports increased by 31% in comparison to 2010.
© Export Entreprises SA, all rights reserved.
Last updates: May 2012
