Argentina Economic Forecast

Argentina Economic Outlook

May 17, 2016

Argentina officially exited default in late April following the payment of USD 9.3 billion to holdout bondholders. The payment was carried out after the government managed to successfully finalize the sale of USD 16.5 billion in bonds. The settlement with the holdouts also paved the way for the government to pay the holders of restructured bonds. Following the end of the holdout saga, the country’s debt rating was upgraded by the three important rating agencies. While the return to credit markets marks a milestone for Argentina, Mauricio Macri’s aggressive reform drive is triggering massive discontent at home. In recent weeks, thousands of people have taken to the streets to protest against layoffs and austerity cuts. Against this backdrop, earlier this month, Macri struck a deal with local businessmen to suspend layoffs for 90 days. High inflation and massive job cuts are a main cause of concern for Argentinians. In April, consumer confidence deteriorated to the lowest level in nearly two years.

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 Rate14.04-0.44 %May 20
Stock Market12,6560.24 %May 20

Argentina Economic Growth

May 17, 2016

A slow adjustment to the new government’s policies, low commodity prices and the prolonged recession in Brazil are factors weighing on this year’s growth outlook. However, following the renewed access to international capital markets, the economy is expected to largely benefit from fresh capital inflows. Analysts project Argentina’s GDP to contract 0.8% in 2016, which is down 0.1 percentage points from last month’s Consensus. For 2017, analysts project the economy to accelerate markedly and increase 3.0%.

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