Argentina Economic Forecast

Argentina Economic Outlook

May 19, 2020

The coronavirus pandemic has hit the country in difficult times. Economic activity shriveled in the first two months of this year after plummeting domestic demand crippled the economy in 2019. Since then, Covid-19 fallout and the lockdown caused industrial activity and exports to plunge in March, while consumer confidence fell deeper into pessimistic territory in March-April. Meanwhile, the debt renegotiation saga continues: After three major creditor groups rejected the initial proposal to restructure over USD 65 billion debt, the government extended negotiations until 22 May, the same day a grace period expires for a USD 503 million debt repayment the government suspended in April. Given the need for the government to meet a minimum participation threshold necessary for a comprehensive restructuring, the outlook for striking a deal looks grim.

Argentina Economic Growth

The Covid-19 crisis will wreak havoc on Argentina’s already ailing economy, lambasting domestic and external demand. The pandemic will also exacerbate the country’s troubled fiscal position, with an increased use of deficit monetary financing on the cards. If the government defaults on its debts, financial turmoil will likely ensue and external financing sources will dry up. LatinFocus Consensus sees the economy contracting 6.9% in 2020, which is down 1.4 percentage points from last month’s estimate, before rebounding 3.5% in 2021.

Argentina Economy Data

2015 2016 2017 2018 2019
Population (million)43.143.644.144.645.1
GDP per capita (USD)15,11012,77814,38612,123-  
GDP (USD bn)652557634540-  
Economic Growth (GDP, annual variation in %)2.7-2.12.7-2.5-  
Domestic Demand (annual variation in %)4.2-1.66.0-3.4-  
Consumption (annual variation in %)3.7-0.84.0-2.4-  
Investment (annual variation in %)3.5-5.812.2-5.7-  
Industrial Production (annual variation in %)0.1-4.52.5-4.6-6.2
Retail Sales (annual variation in %)27.326.020.828.5-  
Unemployment Rate7.  
Fiscal Balance (% of GDP)-5.1-5.8-5.9-5.0-4.3
Public Debt (% of GDP)52.653.156.686.0-  
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)-2.7-2.7-4.9-5.0-  
Current Account Balance (USD bn)-17.6-15.1-31.2-27.3-  
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 %)-
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)25.732.637.051.4-  

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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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