Argentina Economic Forecast

Argentina Economic Outlook

August 6, 2019

The economy seems to have markedly improved in the second quarter, after diving domestic demand caused GDP to contract in the first quarter. The economy expanded for the first time in over one year in May, propped up by a vigorous agricultural sector. Additionally, consumer confidence picked up in Q2, while the trade balance remained in surplus throughout the quarter. In further positive news, on 12 July, the IMF approved a fourth review of the standby credit deal, praising the country’s overcompliance with the deal’s criteria and authorizing the disbursement of a further USD 5.4 billion. Moreover, the government asked the IMF for tougher fiscal goals, to make its commitment to public-debt reduction more credible; in early July, Moody’s had changed its outlook from stable to negative, due to risks of a reversal in fiscal consolidation.

Argentina Economic Growth

The economy is expected to remain in recession this year as elevated inflation, high borrowing costs and reduced public investment weigh on domestic demand. That said, strong agricultural production should support the external sector, while improving fiscal metrics bodes well for investor sentiment. Political uncertainty ahead of October’s elections clouds the outlook. LatinFocus Consensus Forecast analysts see the economy contracting 1.5% in 2019, which is down 0.1 percentage points from last month’s estimate, before expanding 2.1% in 2020.

Argentina Economy Data

20132014201520162017
Population (million)42.242.743.143.644.1
GDP per capita (USD)14,54013,13315,11012,77814,727
GDP (USD bn)614560652557649
Economic Growth (GDP, annual variation in %)2.4-2.52.7-2.12.7
Domestic Demand (annual variation in %)4.0-3.94.2-1.66.0
Consumption (annual variation in %)3.6-4.43.7-0.84.0
Investment (annual variation in %)2.3-6.83.5-5.812.2
Industrial Production (annual variation in %)-0.1-2.50.1-4.52.5
Retail Sales (annual variation in %)26.737.327.326.020.8
Unemployment Rate7.17.37.18.48.4
Fiscal Balance (% of GDP)-1.9-2.4-3.9-5.9-5.9
Public Debt (% of GDP)43.544.752.653.357.1
Money (annual variation in %)25.728.928.230.426.0
Inflation Rate (CPI, annual variation in %, eop)26.638.026.941.024.8
Inflation Rate (CPI, annual variation in %)18.438.026.741.227.7
Inflation (PPI, annual variation in %)0.00.00.0-  -  
Benchmark Interest Rate (%)21.6320.3827.2519.8823.25
Stock Market (annual variation in %)88.959.136.144.977.7
Exchange Rate (vs USD)6.528.4612.9415.8618.60
Exchange Rate (vs USD, aop)5.488.129.2714.7716.56
Current Account (% of GDP)-2.1-1.6-2.7-2.7-4.9
Current Account Balance (USD bn)-13.1-9.2-17.6-15.1-31.6
Trade Balance (USD billion)1.52.7-3.42.1-8.3
Exports (USD billion)76.068.456.857.958.6
Imports (USD billion)74.465.760.255.966.9
Exports (annual variation in %)-5.0-9.9-17.02.01.2
Imports (annual variation in %)9.5-11.7-8.4-7.219.8
International Reserves (USD)30.631.425.639.355.1
External Debt (% of GDP)25.328.325.732.636.1

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Argentina Facts

ValueChangeDate
Bond Yield6.690.15 %Dec 17
Exchange Rate43.880.45 %Jul 31
Stock Market42,0582.26 %Jul 31

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