Argentina Economic Forecast

Argentina Economic Outlook

November 8, 2016

The economy remains in deep recession as a result of the government’s austerity measures, declining real wages and weak demand for Argentinean goods. While the economy is expected to have contracted again in Q3 following Q2’s 3.4% annual decline, some positive signals have started to emerge in recent months. The decline in economic activity softened in August and the upward trend in consumer confidence continued in October. Moreover, international reserves jumped to a three-year high in October due to improved business sentiment. The pace of fiscal consolidation, however, remains a key challenge for President Mauricio Macri’s administration. Although in October the government reinstated a gas subsidy cut after the original had been temporary annulled by the Supreme Court in August, the slash introduced this time around was smaller and will be implemented more gradually.

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 Rate15.930.51 %Dec 02
Stock Market16,948-0.55 %Dec 02

Argentina Economic Growth

November 8, 2016

This year, the economy has been plagued by the government’s austerity measures and a weak external sector. In 2017, however, the country will return to growth due to revived public spending in the wake of the 2017 general election and to the recovery in Brazil. The panel cut their GDP forecast for this year by 0.2 percentage points and they now expect the economy to fall 1.8%. Analysts see the economy rising 3.2% next year.

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