Argentina Economic Forecast

Argentina Economic Outlook

October 10, 2017

Solid growth in fixed investment and private consumption propelled economic growth in Q2 to a 2.7% annual expansion, the fastest rate in almost two years. The quarterly print taken together with more recent data suggest that the recovery is gaining traction. In July, economic activity expanded at the fastest in over two years and industrial production logged its fourth consecutive increase in August. Noting these economic tailwinds, the government presented the 2018 budget to Congress. The bill envisages GDP growth of 3.0% this year and 3.5% next year along with a significant narrowing of the fiscal deficit. Although 2017’s growth figure was revised down from the previous estimate, latest polls put the government ahead in the runoff legislative elections of 22 October. Growing confidence on Macri’s economic policies is becoming more apparent as recent data, such as a decline in unemployment in Q2 and falling poverty in the first two quarters, suggests that growth is finally permeating across all social strata.

Argentina Economy Data

20122013201420152016
Population (million)41.742.242.743.143.6
GDP per capita (USD)13,88514,54013,13314,85412,507
GDP (USD bn)579614560641545
Economic Growth (GDP, annual variation in %)-1.02.4-2.52.6-2.2
Domestic Demand (annual variation in %)-1.34.0-3.94.0-0.7
Consumption (annual variation in %)1.13.6-4.43.5-1.4
Investment (annual variation in %)-7.12.3-6.83.8-5.1
Industrial Production (annual variation in %)-7.80.0-1.8-  -4.6
Retail Sales (annual variation in %)26.326.737.327.326.2
Unemployment Rate7.27.17.37.18.4
Fiscal Balance (% of GDP)-2.1-1.9-2.4-3.9-5.9
Public Debt (% of GDP)34.133.039.653.554.2
Money (annual variation in %)38.425.728.928.230.4
Inflation Rate (CPI, annual variation in %, eop)10.826.638.026.941.0
Inflation Rate (CPI, annual variation in %)10.018.438.026.741.2
Inflation (PPI, annual variation in %)13.114.828.3-  -  
Benchmark Interest Rate (%)12.4217.7519.6127.5618.17
Stock Market (annual variation in %)15.988.959.136.144.9
Exchange Rate (vs USD)4.926.528.4612.9415.86
Exchange Rate (vs USD, aop)4.555.488.129.2714.77
Current Account (% of GDP)-0.4-2.1-1.6-2.6-2.8
Current Account Balance (USD bn)-2.3-13.0-8.9-16.8-15.0
Trade Balance (USD billion)12.01.53.2-3.02.1
Exports (USD billion)80.076.068.456.857.7
Imports (USD billion)68.074.465.259.855.6
Exports (annual variation in %)-3.6-5.0-9.9-17.01.7
Imports (annual variation in %)-8.19.5-12.4-8.4-6.9
International Reserves (USD)43.330.631.425.638.8
External Debt (% of GDP)28.025.929.026.635.3

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Argentina Facts

ValueChangeDate
Bond Yield6.690.15 %Dec 17
Exchange Rate17.460.45 %Oct 19
Stock Market26,8052.26 %Oct 19

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Argentina Economic Growth

October 10, 2017

Buoyed by business-friendly reforms adopted by the Macri administration, the economy is expected to rebound this year and gain speed next. Fixed investment should recover due to an improved business environment and higher public infrastructure spending, while household spending should benefit from declining inflation and rising wages. FocusEconomics panelists foresee the economy expanding 2.7% this year, and 3.0% in 2018, which is up 0.1 percentage points from last month’s forecast.

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