Argentina Economic Forecast

Argentina Economic Outlook

November 10, 2020

The economic situation remained dire in Q3, after GDP collapsed in Q2. While the pace of the decline in economic activity softened in July-August from Q2, it remained considerable. Similarly, consumer confidence remained downbeat in Q3, pointing to constrained household spending. Moreover, merchandise exports plunged, although this could be partly due to under-reporting associated with a distorted exchange rate market. Moving to Q4, increased consumer pessimism in October, coupled with a still-high number of new Covid-19 cases, which led to the extension of restrictions in some regions, bodes ill for the recovery. However, in a bid to support the tourism sector, the government announced it would resume international flights to allow tourists from neighboring countries to enter from November. On the debt front, IMF staff will return in mid-November to make progress on replacing a USD 57 billion loan deal struck in 2018.

Argentina Economic Growth

The economy should rebound, albeit timidly, in 2021 after this year’s sharp contraction. That said, protracted macroeconomic imbalances, sky-high inflation, capital controls and potentially market-unfriendly policies will weigh on growth. The unpredictable course of the pandemic poses an additional downside risk to the outlook. LatinFocus Consensus panelists see the economy growing 4.5% in 2021, which is down 0.5 percentage points from last month’s estimate, and 2.6% in 2022.

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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