Economy of Argentina
Economy of Argentina. Argentina economy explained argentina economy collapse argentina economy crisis argentina melei argentina dollorization argentina peso argentina china. The economy of Argentina the economy of argentina argentina economy argentina inflation javier milei argentina economic crisis economy. Economy 2024 argentina economy 2023 economy of argentina 2024 argentina economic collapse economy explained argentina gdp. World Bank IMF buenos aires argentina news trade economy ranking 2024 growth of argentina import export petroleum latin america argentina economy explained. Argentina’s economy, which is one of the most powerful in the region, is dependent on services and manufacturing. Argentina still produces more grain than any other country in Latin America and is second in cattle raising only to Brazil, and its receipts from tourism are second in the region only to those of Mexico. Its gross national product (GNP), GNP per capita, and value-added from manufacturing are also among the highest in the region. However, the country has withstood several economic downturns, including periods of high inflation and unemployment during the late 20th century and a major financial crisis in the early 21st century.
More than three-fifths of the Argentine GDP and a comparable portion of the labor force is based on services, including retail trade, hotels, restaurants, trucking and other transportation, government, education, health care, and various other business and social services. Retail and wholesale commerce alone account for about one-seventh of GDP, and business services account for a slightly lesser portion.
Growth is weakening
Output contracted in the last quarter of 2022, mainly driven by a decline in investment and private consumption. Short-term indicators point to a further contraction during the first half of 2023, as agricultural production is affected by a severe drought. Unemployment has returned to pre-pandemic levels, reaching 6.3% in the fourth quarter of 2022, although informality has increased sharply, approaching 40% of the labor force. Consumer confidence has declined. Headline inflation rose to 108.8% in the year to April, the highest level in over 30 years, amid a widening gap between the managed official and the parallel exchange rates. With no formal anchor for inflation expectations, inflation is broad-based, and core inflation is at 105%.
The World Bank’s latest global forecast predicts that Argentina's economy will return to growth in 2024 while sounding the alarm about the potential impact of ongoing economic and political uncertainty.
According to the institution, which highlighted the impact of last year’s heavy drought, Argentina’s GDP likely contracted by 2.5 percent in 2023.
The World Bank forecast that the economy would return to a growth of 2.7 percent in 2024 and 3.2 percent in 2025.
The institution expects Argentina’s economy to improve despite the absence of signs of easing in inflation, it said in its Global Economic Prospects report.
The forecast reflects a recovery from the drought of 2023, which caused a decline in the country's main commodity exports (corn and soybeans), worth almost 3% percent of GDP, said the report’s authors.
Argentina's GDP
Analysing Argentina’s current outlook, the World Bank warned of significant economic and political uncertainty amid high inflation and a pronounced currency depreciation, which continues to erode consumer confidence.
It highlighted the relentless rise of prices and warned that there is also little room for fiscal spending to support activity as the government seeks to address pressing issues of fiscal sustainability.
Zooming out, the World Bank said that the global economy is on track for a woeful decade of growth unless policymakers can boost investment and strengthen government balance sheets.
Global growth is set to slow from an estimated 2.6 percent in 2023 to 2.4 percent this year, the World Bank said in its report.
Inflation in Argentina has hit 161%. Its economy is shrinking, in part because of a ruinous drought. In the past five years, its currency has lost about 90% of its value against the U.S. dollar. Its debts, including $45 billion that it owes the International Monetary Fund, are suffocating. One in four Argentinians lives in poverty.
The painful economic steps that Argentina’s new president, Javier Milei, announced last year in December of 2023: Slashing the currency’s value in half. Reducing aid to provincial governments. Suspending public works. Cutting subsidies for gas and electricity. Raising some taxes. Resources and power.
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