Argentina Economic Forecast

Argentina Economic Outlook

January 18, 2022

The economy rebounded in sequential terms in Q3 last year, supported by the easing of restrictions, but annual growth eased on a fading base effect. Underlying momentum should have softened in Q4. Activity dropped month-on-month in October, while stubbornly high inflation in October–December and declining consumer sentiment in the quarter likely restrained consumer spending. Meanwhile, clouds are gathering over the economy in the first stretch of the new year: Covid-19 cases have soared to record numbers amid the spread of the Omicron variant, while the government authorized an increase in prices for electricity and natural gas in a bid to reduce the fiscal deficit. Meanwhile, the sovereign bond market is seeing some turbulence as the country struggles to reach an agreement with the IMF for the repayment of its USD 45 billion debt, due to differences over the path to reducing the deficit.

Argentina Economic Growth

GDP should expand at a notably slower pace this year as the favorable base effects wanes. On top of this, downbeat consumer and investor confidence amid protracted macro imbalances will restrain growth. Moreover, policy and pandemic-related uncertainty pose downside risks, as does the uncertain outcome of debt renegotiation talks. LatinFocus Consensus panelists see the economy growing 2.3% in 2022, which is unchanged from last month’s estimate, and 2.2% in 2023.

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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