AICEP
Agência para o Investimento e Comércio Externo de Portugal

CABEÇALHO

On 20 June, the IMF and Argentina formalized a three-year USD 50 billion Stand-by Arrangement. The deal aims to shield the economy from financial turbulence as the government rebuilds economic buffers, stabilizes debt levels and substantially lowers fiscal spending.

The agreement coincided with an upgrade to emerging market status by the MSCI index on the same day. The upgrade is expected to result in investment inflows of USD 4.5 billion into the economy and represents an important political victory for the government against a complicated economic panorama. The first batch of real data from the Q2 was weak, with industrial production declining in May and economic activity recording its first contraction in over a year in April. Similarly, Central Bank efforts to stem the currency’s slide have so far failed, and the peso set a new record low on 29 June over growing concerns that the government will struggle to comply with IMF terms as discontent in the country grows.

 

Argentina Economic Growth

 

A devastating drought in the first quarter, fiscal austerity, record-high interest rates and constrained private consumption due to a weaker currency and low consumer confidence will cause economic growth in 2018 to decelerate sharply from 2017’s strong figure. Panelists participating in the LatinFocus Consensus Forecast foresee the economy expanding 0.9% in 2018, which is down 0.8 percentage points from last month’s forecast. For 2019, growth is expected to reach 2.1%.

 
Argentina Economy Data
2013 2014 2015 2016 2017
Population (million) 42.2 42.7 43.1 43.6 44.1
GDP per capita (USD) 14,540 13,133 15,110 12,507 14,609
GDP (USD bn) 614 560 652 554 644
Economic Growth (GDP, annual variation in %) 2.4 -2.5 2.7 -1.8 2.9
Domestic Demand (annual variation in %) 4.0 -3.9 4.2 -1.3 6.3
Consumption (annual variation in %) 3.6 -4.4 3.7 -1.0 3.6
Investment (annual variation in %) 2.3 -6.8 3.5 -4.9 11.3
Industrial Production (annual variation in %) 0.0 -1.8 0.4 -4.6 1.8
Retail Sales (annual variation in %) 26.7 37.3 27.3 26.2 20.8
Unemployment Rate 7.1 7.3 7.1 8.4 8.4
Fiscal Balance (% of GDP) -1.9 -2.4 -3.9 -5.9 -6.0
Public Debt (% of GDP) 43.5 44.7 52.6 53.3 57.1
Money (annual variation in %) 25.7 28.9 28.2 30.4 26.0
Inflation Rate (CPI, annual variation in %, eop) 26.6 38.0 26.9 41.0 26.1
Inflation Rate (CPI, annual variation in %) 18.4 38.0 26.7 41.2 27.7
Inflation (PPI, annual variation in %) 14.8 28.3 -   -   -  
Benchmark Interest Rate (%) 21.63 20.38 27.25 19.88 23.25
Stock Market (annual variation in %) 88.9 59.1 36.1 44.9 77.7
Exchange Rate (vs USD) 6.52 8.46 12.94 15.86 18.60
Exchange Rate (vs USD, aop) 32.63 29.83 52.85 22.60 17.30
Current Account (% of GDP) -2.1 -1.6 -2.6 -2.7 -4.8
Current Account Balance (USD bn) -13.0 -8.9 -16.8 -15.0 -30.8
Trade Balance (USD billion) 1.5 3.2 -3.0 2.1 -8.5
Exports (USD billion) 76.0 68.4 56.8 57.7 58.4
Imports (USD billion) 74.4 65.2 59.8 55.6 66.9
Exports (annual variation in %) -5.0 -9.9 -17.0 1.7 1.2
Imports (annual variation in %) 9.5 -12.4 -8.4 -6.9 20.3
International Reserves (USD) 30.6 31.4 25.6 38.8 55.1
External Debt (% of GDP) 25.9 29.0 26.1 34.7 36.2

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