Argentina Economic Forecast

Argentina Economic Outlook

February 14, 2017

Although GDP is expected to have contracted again in Q4, there are some incipient signs of economic recovery. Stronger growth in the automotive and food sectors is shoring up industrial activity, while recent consumer confidence readings suggest private consumption has likely bottomed out. Moreover, the external sector is benefiting from better growth dynamics in the region overall, though the strong rebound in exports seen in November and December partially reflected a low base of comparison from the previous year. Treasury Minister Nicolas Dujovne announced on 24 January that the country’s fiscal deficit for 2016 was 4.7% of GDP, beating the government’s 4.8% target. Although the government plans to reduce the deficit further to 4.2% of GDP in 2017, analysts are not optimistic about the prospects. The 2016 target was met mostly due to the positive effect of a tax amnesty, while elections this year could encourage government spending.

Argentina Economy Data

20112012201320142015
Population (million)40.641.041.542.042.4
GDP per capita (USD)13,76814,80115,03912,90010,301
GDP (USD bn)559607624541437
Economic Growth (GDP, annual variation in %)8.40.82.90.52.1
Domestic Demand (annual variation in %)11.80.54.2-1.0-  
Consumption (annual variation in %)10.24.34.4-0.5-  
Investment (annual variation in %)19.4-7.03.1-5.5-  
Industrial Production (annual variation in %)6.5-7.80.0-1.8-  
Retail Sales (annual variation in %)27.726.326.737.327.6
Unemployment Rate7.27.27.17.3-  
Fiscal Balance (% of GDP)-1.2-1.8-1.7-2.5-4.0
Public Debt (% of GDP)32.032.532.541.050.9
Money (annual variation in %)29.838.425.728.928.2
Inflation Rate (CPI, annual variation in %, eop)9.510.826.638.026.9
Inflation Rate (CPI, annual variation in %)9.810.018.438.026.7
Inflation (PPI, annual variation in %)12.713.114.828.3-  
Benchmark Interest Rate (%)13.3212.4217.7519.6127.56
Stock Market (annual variation in %)-30.115.988.959.136.1
Exchange Rate (vs USD)4.304.926.528.4612.94
Exchange Rate (vs USD, aop)4.134.555.488.129.27
Current Account (% of GDP)-0.8-0.2-1.9-1.5-3.6
Current Account Balance (USD bn)-4.5-1.4-12.1-8.1-15.9
Trade Balance (USD billion)9.012.01.53.1-3.0
Exports (USD billion)83.080.076.068.356.8
Imports (USD billion)74.068.074.465.259.8
Exports (annual variation in %)21.7-3.6-5.0-10.0-17.0
Imports (annual variation in %)30.2-8.19.5-12.4-8.3
International Reserves (USD)46.443.330.631.425.6
External Debt (% of GDP)25.523.622.626.5-  

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Argentina Facts

ValueChangeDate
Bond Yield6.690.15 %Dec 17
Exchange Rate15.430.37 %Feb 16
Stock Market19,563-0.48 %Feb 16

Argentina Economic Growth

February 14, 2017

The economy will bounce back this year as lower inflation will support private consumption, while the external sector will benefit from stronger regional growth. Moreover, the economic reforms implemented by Macri’s administration will start to take off, buttressing business sentiment and propelling investment. Analysts foresee the economy expanding 3.0% this year, which is unchanged from last month’s estimate, and 3.1% in 2018.

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