Argentina Economy Facts

Economical overview

Argentina has one of Latin America’s largest economies. The country has great natural resources, besides fertile soil there is oil, natural gas, copper, gold and uranium as well as a number of other minerals. Agriculture and the food industry still account for a large proportion of export earnings. Industrialization has come further than in most other parts of Latin America. In recent years, service industries have become increasingly important. There is also a large informal sector. Since 2018, the economy is in a deep crisis and Argentina has been forced to take large loans from the International Monetary Fund (IMF) to deal with the situation.

One hundred years ago, Argentina was one of the world’s ten richest countries. But the country had a highly regulated economy, where production was protected by customs and where the state owned many large companies. From the 1960s Argentina faced increasing financial problems. The military regime in 1976–1983 decided to open the economy to the outside world, which led to many industries being knocked out. At the same time, the junta took large loans and the foreign debt rose.

  • Major imports by Argentina, covering a full list of top products imported by the country and trade value for each product category.

Emergency crisis

In the 1990s, the economy was further liberalized. Government companies were sold and customs and other barriers to trade were removed. The exchange rate for the Argentine Peso was tied to the dollar and prices stabilized. Growth in the economy was good until 1998. Since then, the business cycle has turned downwards. Both the federal government and the provinces covered the deficits with new loans, while capital flowed out of the country. Increasingly large sums went to interest rates and installments on the loans. Peson was overvalued through its connection to the dollar, which pushed up the price of Argentine export goods.

  • Check this abbreviation website to find three letter ISO codes for all countries in the world, including ARG which represents the country of Argentina. Check findjobdescriptions to learn more about Argentina.

From 1998 to 2002, GDP fell by 20 percent and central government debt represented 166 percent of GDP. In 2002, then President Eduardo Duhalde decided to free the peso from the dollar, which in practice meant a sharp devaluation. Argentina temporarily suspended all payments on the external debt.

High prices of agricultural products favor Argentina

2003 reversed the trend. Peson’s low value made Argentine exports cheaper abroad and industrial production rose, partly with the help of government subsidies. The country was favored by low international interest rates and high world market prices of agricultural commodities. GDP rose sharply for several years in a row. From 2006, the government was able to show a better balance in the state budget, mainly through rising tax revenues, but the state’s finances fell to a minus when the costs of the loans were included. The government invested large sums on helping the poorest residents, among other things, by keeping down prices for food, electricity and other things.

Export taxes on agricultural commodities became an increasingly important income for the state, but when the government decided to sharply increase them, it led to protests that for a few months 2008 stopped large parts of agricultural exports. In the autumn of the same year, the international financial crisis and the subsequent recession began to affect the Argentine economy, but already in 2010 the growth figures turned upwards.

New problems

But the recovery was short-lived. In 2012, world market prices fell on several of the most important export goods. Concerns about a new devaluation once again led to foreign currency flowing out of the country. The government tried to protect the economy by, among other things, imposing restrictions on how many dollars residents could exchange. The rules also prevented foreign companies from bringing home their profits to the parent companies, which caused many of them to hesitate to make investments in Argentina. Through support purchases, the central bank tried to keep the exchange rate of the peson up, but at the same time the dollar rose rapidly in value on the black market. The Argentines who could buy dollars to secure their savings. Measures were also taken to limit imports. In that crank, the government decided to take over the ownership stake in the oil company YPF, which was largely owned by Spanish Repsol. The government justified the decision that Repsol had not made sufficient investments in the energy sector (in 2013, however, the parties agreed that the Spanish company would be compensated by $ 5 billion).

The fact that Argentina, which was previously a major exporter of oil and gas, also had to import more energy than the country exported, contributed to the lack of foreign currency and created new holes in the treasury.

From 2005, inflation had also accelerated. The government was accused of hiding the problems through unreliable statistics. According to official figures, inflation was 8-10 percent a year, but most economists thought it was double, or even three times as high. The latter seemed to be right when Argentina presented a new consumer price index in early 2014 after the IMF threatened to exclude the country. The government has tried to control the situation through new price hikes on basic commodities. However, in order to pay off their loans, the government had to withdraw money from the declining foreign exchange reserves.

In early 2014, the central bank stopped buying Argentine pesos. The exchange rate fell in just a few days by 20 percent against the dollar. At the same time, some of the restrictions on foreign currency holdings were lifted. It became legal again to buy dollars to save their savings, however, a limit was set at $ 2,000 a month for those earning 7,200 pesos (about $ 900) a month.

The restrictions were removed in connection with the change of power at the end of 2015. This led to a sharp fall in the peso (around 30 percent) against the dollar. Some export taxes on agricultural goods were also abolished.

debt issue

Many Argentinians gave the IMF some of the blame for the economic collapse in the early 1990s (in 2004, the IMF admitted that the organization had contributed to the crisis to some extent). In order to avoid the IMF’s demands for new loans, then-President Néstor Kirchner decided in 2005 via decree that Argentina would pay its entire debt to the IMF in excess of $ 9 billion. Money for this was partly borrowed from Venezuela, but at high interest rates.

In 2005, Argentina also had $ 100 billion in debt to private investors who had bought Argentine government bonds before 2002. Faced with the risk of losing all their money, the government managed to get the lenders to write down the debt by 70-75 percent. In 2005, the agreement was approved by 76 percent of the lenders. A new settlement with several remaining lenders was concluded in 2010, but in 2013 debts of more than $ 11 billion remained, among other things, to some American so-called hedge funds that refused to agree to any renegotiation or write-down of the debt. The hedge funds had bought promissory notes at discounted prices during the crisis but now demanded payment at their original value. In August 2013, a New York court ruled that Argentina would pay $ 1.3 billion to hedge funds, a decision that Argentina appealed to the United States:

A bright spot in the debt problem occurred in May 2014, when Argentina agreed with the 19 countries of the Paris Club on the terms to repay the country’s debt to the club at $ 9.5 billion.

During the summer, the problems accumulated. The Supreme Court rejected Argentina’s appeal against the New York verdict and a process was initiated to recover the money. When the final deadline was passed on July 31 without Argentina paying, several international credit rating agencies explained that the country was in “limited state bankruptcy” which was expected to seek increased economic instability and capital flight.

However, the new government that took office in 2015, under President Mauricio Macri, agreed to a deal with the hedge funds in February 2016. It was approved by Congress a month later. The deal was expected to cost the Argentine state about $ 4.6 billion. This made it easier for Argentina to borrow money in the open market. It was also hoped that Argentines who placed their assets abroad would take home their money.

New emergency crisis

However, the economy continued to have problems. In May 2018, Argentina applied for a $ 50 billion crisis loan from the IMF. In the months following, the economy deteriorated further and in August of the same year, the Argentine government was forced to ask the IMF to advance the payments. In exchange, the IMF demanded new austerity in the state budget. From the beginning of the year, the value of the Argentine peso had fallen by 40 percent against the dollar and inflation remained high (around 30 percent in the first eight months of 2018). The deficit in the state budget was estimated at just under 4 percent of GDP in 2017. The value of the peso continued to fall despite new and sharp interest rate hikes, and the government announced several tough austerity measures. Abolished subsidies on electricity and fuel, among other things, hit hard on many ordinary Argentinians who found it difficult to get the economy together. In the first three quarters of 2019, Argentina’s GDP fell by more than 2 percent. The financial sector was particularly hard hit, but the industry, the retail sector and the construction sector also had major problems.

The question is what the change of power in December 2019 will mean for the Argentine economy. Alberto Fernández said in the weeks before he would take over the presidential post that he would forgo the forthcoming IMF loan payment in order not to increase Argentina’s already large debt. At the end of the year, several crisis measures were adopted to boost the economy (see Calendar). The government also decided not to pay all overdue debts until August 2020.

Read more about the causes of the recent economic crisis in Argentina – the crisis in six charts


GDP per person

US $ 11,653 (2018)

Total GDP

US $ 518 475 M (2018)

GDP growth

-2.5 percent (2018)

Agriculture’s share of GDP

6.1 percent (2018)

Manufacturing industry’s share of GDP

12.8 percent (2018)

The service sector’s share of GDP

55.6 percent (2018)


54.4 percent (2019)

Government debt’s share of GDP

86.1 percent (2018)


Argentine peso

Merchandise exports

US $ 61,638 million (2018)


US $ 62 505 M (2018)

Current account

– US $ 27,479 million (2018)

Commodity trade’s share of GDP

25 percent (2018)

Main export goods

agricultural products (animal feed, meat, soybean oil, cereals), vehicles

Largest trading partner

Brazil, China, USA, Chile, Germany



Kirchner’s peronist faction wins the congressional election

The congressional election will be a success for the Victory Front, President Kirchner’s faction of the Peronist Party, which now takes control of 118 of the 257 seats in the Chamber of Deputies. Peronismo Federal, the faction led by former President Eduardo Duhalde, has to settle for 31 seats. The Radical Party (UCR) wins 36 seats in the Chamber of Deputies. The Peronists also become the largest in the Senate elections.



Amnesty for ex-military is lifted

The Senate votes to repeal the laws that protected former militants from prosecution for the gross abuses committed during the 1976–1983 dictatorship.


Menem jumps off the election, Kirchner becomes president

Before the second round of the presidential election, Néstor Kirchner is leading the way in opinion polls. That causes Menem to step down and Kirchner can take over as president on May 25.


Menem wins the first round of the presidential election

The Peronist Party has not been able to agree on a joint candidate in the presidential election on the 27th. Three factions stand with each candidate. Of those, former President Carlos Menem gets the most votes 24 percent, closely followed by Néstor Carlos Kirchner, who gets 22 percent. The third of the elections will be Ricardo López Murphy from the right- wing alliance Frepaso, which received 16 percent.

Argentina Economy Facts

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