Argentina Economic Forecast

Argentina Economic Outlook

September 14, 2021

The economy is expected to have gained traction on an annual basis in Q2, benefiting from a low base effect, although it seemingly weakened in sequential terms amid high new Covid-19 cases. Both economic activity and industrial production followed a similar path: They soared in annual terms throughout Q2, but shrank month-on-month in April–May to then bounce back in June amid easing mobility restrictions. Moreover, consumer sentiment deteriorated in Q2, spelling trouble for household spending. Activity should gain strength in sequential terms in Q3, as suggested by sustained growth in merchandise exports in July and recovering consumer confidence in July-August. In politics, President Alberto Fernández’s leftist Peronist party suffered a notable defeat in the mid-term congressional primaries held on 12 September, while the center-right opposition coalition gained significant ground ahead of November’s elections.

Argentina Economic Growth

The economy is set to rebound this year, also thanks to a low base of comparison. Domestic and external demand should benefit from the gradual lifting of restrictions, although policy uncertainty and capital controls will restrain the recovery. Uncertainty related to the pandemic and to the outcome of ongoing debt renegotiations with the IMF poses further risks. LatinFocus Consensus panelists see the economy growing 6.9% in 2021, which is up 0.3 percentage points from last month’s estimate, and 2.5% in 2022.

Argentina Economy Data

2015 2016 2017 2018 2019
Population (million)43.143.644.144.645.1
GDP per capita (USD)15,11012,77814,72712,1239,679
GDP (USD bn)652557649540436
Economic Growth (GDP, annual variation in %)2.7-2.12.7-2.5-2.2
Domestic Demand (annual variation in %)4.2-1.66.0-3.4-8.7
Consumption (annual variation in %)3.7-0.84.0-2.4-6.4
Investment (annual variation in %)3.5-5.812.2-5.7-15.9
Industrial Production (annual variation in %)0.1-4.52.5-5.0-6.4
Retail Sales (annual variation in %)27.326.020.828.545.4
Unemployment Rate7.18.48.49.29.8
Fiscal Balance (% of GDP)-5.1-5.8-5.9-5.0-3.8
Public Debt (% of GDP)52.653.156.686.089.4
Money (annual variation in %)28.230.426.022.830.9
Inflation Rate (CPI, annual variation in %, eop)26.941.024.847.653.8
Inflation Rate (CPI, annual variation in %)26.741.227.7-  -  
Inflation (PPI, annual variation in %)0.0-  -  -  -  
Benchmark Interest Rate (%)27.2519.8823.2549.5040.31
Stock Market (annual variation in %)36.144.977.70.837.6
Exchange Rate (vs USD)12.9415.8618.6037.6659.88
Exchange Rate (vs USD, aop)9.2714.7716.5628.0848.22
Current Account (% of GDP)-2.7-2.7-4.8-5.0-0.8
Current Account Balance (USD bn)-17.6-15.1-31.2-27.3-3.5
Trade Balance (USD billion)-3.42.1-8.3-3.716.0
Exports (USD billion)56.857.958.661.865.1
Imports (USD billion)60.255.966.965.549.1
Exports (annual variation in %)-17.02.01.35.35.4
Imports (annual variation in %)-8.4-7.219.8-2.2-25.0
International Reserves (USD)25.639.355.165.844.8
External Debt (% of GDP)25.732.636.151.463.7

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Argentina Facts

Value Change Date
Bond Yield6.690.15 %Dec 17
Exchange Rate59.880.45 %Dec 30

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