Argentina Economic Forecast

Argentina Economic Outlook

June 12, 2018

Argentina and the IMF reached a preliminary agreement on 7 June for a three-year USD 50 billion stand-by arrangement that will keep the economy afloat as the government pushes through economic reforms. While the final agreement is still subject to approval by the IMF board, the government pledged to now accelerate economic reforms, including reforming the Central Bank charter, reducing currency interventions and achieving a primary fiscal surplus by the year 2021. These measures are intended to make the economy more resilient to economic shocks and capable of achieving faster economic growth in the medium and long term. However, the tough reforms and fiscal consolidation are expected to have a negative impact on economic growth in the short term and weigh on the ongoing economic recovery. GDP is expected to have expanded solidly in the first quarter due to buoyant growth in the domestic economy.

Argentina Economic Growth

Economic growth is expected to slow sharply from 2017’s strong expansion due to fiscal consolidation measures, restrictive credit conditions and the pass-through effect of higher inflation on private consumption. Panelists participating in the LatinFocus Consensus Forecast foresee the economy expanding 1.7% in 2018, which is down 0.6 percentage points from last month’s forecast. For 2019, growth is expected to reach 2.5%.

Argentina Economy Data

20132014201520162017
Population (million)42.242.743.143.644.1
GDP per capita (USD)14,54013,13315,11012,50714,609
GDP (USD bn)614560652554644
Economic Growth (GDP, annual variation in %)2.4-2.52.7-1.82.9
Domestic Demand (annual variation in %)4.0-3.94.2-1.36.3
Consumption (annual variation in %)3.6-4.43.7-1.03.6
Investment (annual variation in %)2.3-6.83.5-4.911.3
Industrial Production (annual variation in %)0.0-1.80.4-4.61.8
Retail Sales (annual variation in %)26.737.327.326.220.8
Unemployment Rate7.17.37.18.48.4
Fiscal Balance (% of GDP)-1.9-2.4-3.9-5.9-6.0
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)26.638.026.941.026.1
Inflation Rate (CPI, annual variation in %)18.438.026.741.227.7
Inflation (PPI, annual variation in %)14.828.3-  -  -  
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)32.638.129.2714.7717.30
Current Account (% of GDP)-2.1-1.6-2.6-2.7-4.8
Current Account Balance (USD bn)-13.0-8.9-16.8-15.0-30.8
Trade Balance (USD billion)1.53.2-3.02.1-8.5
Exports (USD billion)76.068.456.857.758.4
Imports (USD billion)74.465.259.855.666.9
Exports (annual variation in %)-5.0-9.9-17.01.71.2
Imports (annual variation in %)9.5-12.4-8.4-6.920.3
International Reserves (USD)30.631.425.638.855.1
External Debt (% of GDP)25.929.026.134.736.2

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Argentina Facts

ValueChangeDate
Bond Yield6.690.15 %Dec 17
Exchange Rate27.920.45 %Jun 14
Stock Market30,1152.26 %Jun 14

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