Argentina Economic Forecast

Argentina Economic Outlook

October 11, 2021

GDP growth accelerated on an annual basis in Q2, supported by a low base effect and an upbeat construction sector, although the economy shrank in sequential terms amid tougher restrictions. Turning to Q3, while annual growth likely slowed due to a fading base effect, activity should have rebounded sequentially amid a supportive external sector and somewhat less downbeat consumer sentiment. Meanwhile, the country made a USD 1.9 billion payment to the IMF in September, in a bid to reach a new deal over its remaining debt. Moreover, in the same month the government presented the draft 2022 budget, which sees the fiscal deficit at 3.3% of GDP and economic growth at 4.0%. In politics, following a defeat for Alberto Fernández’s leftist party in September’s mid-term congressional primaries, the president reshuffled his cabinet and announced new stimulus measures, starting with an immediate minimum wage hike.

Argentina Economic Growth

GDP will rebound this year, partly thanks to a low base effect, while the pace of growth will slow significantly in 2022 as weak macro fundamentals, capital controls and a lack of investor confidence weigh on the economy. Pandemic-related uncertainty, ongoing debt renegotiations and the outcome of November’s elections are key factors to watch. LatinFocus Consensus panelists see the economy growing 7.3% in 2021 and 2.3% in 2022, which is down 0.2 percentage points from last month’s estimate.

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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