Argentina Economic Outlook
Important regional player:
Argentina is Latin America's third-largest economy, with a GDP of slightly over USD 600 billion. It is a member of the Mercosur trade pact, which also includes Brazil, Paraguay and Uruguay.
Agricultural heavyweight:Argentina's economy is significantly bolstered by its strong agricultural sector. It is one of the world's largest producers of soybeans, corn, and wheat, with agriculture constituting a major part of its exports. The fertile Pampas region is particularly crucial for crop production and cattle ranching, though in recent years it has suffered from drought.
Runaway inflation:Inflation has surged in recent years, moving well into triple-digit territory recently to among the highest rates in the world, sustained currency depreciation. This has harmed purchasing power, caused emigration—particularly of young professionals—spawned a rush to obtain U.S. dollars and forced the central bank to keep interest rates high.
History of economic instability:Argentina is no stranger to extreme economic conditions; it has suffered multiple debt defaults and bouts of hyperinflation in its relatively short history as an independent country and has often required IMF bailouts. The most recent default came in 2020—the third so far this century. In 2022, GDP per capita was still notably below its decade-ago level.
Libertarian laboratory:Since diehard libertarian Javier Milei clinched the presidency in late-2023, he has embarked on a radical transformation of Argentina’s economy. Public spending has been slashed and the budget brought back into balance, and the government has embarked on the liberalization of large sectors of the economy. This approach led to a surge in inflation and a sharp recession early in his premiership, shortly afterwards followed by tumbling price pressures and a strong economic recovery.
Argentina's economic outlook:GDP is seen beating the Latin American average in the long term, following an expected contraction in 2024 brought on by triple-digit inflation and government spending cuts. President Milei's liberalizing reforms should boost economic activity, though taming inflation and fixing the dysfunctional exchange rate system will be key challenges.
Argentina's Macroeconomic Analysis:
Nominal GDP of USD 647 billion in 2023.
Nominal GDP of USD 633 billion in 2024.
GDP per capita of USD 13,422 compared to the global average of USD 10,589.
GDP per capita of USD 13,865 compared to the global average of USD 10,589.
Average real GDP growth of 0.3% over the last decade.
Average real GDP growth of 0.1% over the last decade.
Sector Analysis
In 2022, services accounted for 52.8% of overall GDP, manufacturing 16.3%, other industrial activity 24.8%, and agriculture 6.1%. Looking at GDP by expenditure, private consumption accounted for 67.2% of GDP in 2023, government consumption 15.8%, fixed investment 19.5%, and net exports -2.5%.International trade
In 2023, manufactured products made up 18.9% of total merchandise exports, mineral fuels 8.8%, food 52.7%, ores and metals 0.4% and agricultural raw materials 0.7%, with other categories accounting for 18.5% of the total. In the same period, manufactured products made up 73.9% of total merchandise imports, mineral fuels 10.5%, food 10.7%, ores and metals 2.9% and agricultural raw materials 0.9%, with other goods accounting for 1.1% of the total. Total exports were worth USD 79.70 billion in 2024, while total imports were USD 60.80 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 0.3% in the decade to 2023. The economy faced significant contractions, particularly during periods of political uncertainty and fiscal imbalances. Inflation and currency devaluation further hampered growth, with a notable recession in 2018-2019. Despite some recovery attempts, the COVID-19 pandemic exacerbated the economic downturn. By 2023, Argentina had slipped back into contraction, weighed on by soaring inflation and drought crimping agricultural production. To read more about GDP growth in Argentina, go to our dedicated page.
Fiscal policy
Argentina's fiscal deficit averaged 4.6% of GDP in the decade to 2023. The government's efforts to finance its deficit led to mounting debt and currency devaluation. Despite various fiscal reform attempts, including subsidies reduction and tax increases, persistent economic challenges hindered effective deficit reduction. The situation was further aggravated by the COVID-19 pandemic, which necessitated increased government spending, further straining public finances and leading to negotiations for international financial support. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 8.2% in the decade to 2023. The rate was relatively stable in the early part of the decade but began to rise as the country faced increasing fiscal challenges and inflation. The situation worsened with the economic impact of the COVID-19 pandemic, leading to a double-digit unemployment rate in 2020. Unemployment fell in the following years however, thanks to recovery from the pandemic. For more information on Argentina's unemployment click here.
Inflation
Inflation averaged 64.0% in the decade to 2024. Price dynamics worsened over the years, with inflation soaring to over 100% in 2023. The government of Libertarian Javier Milei is attempting to rein in inflation by slashing government spending and controlling the currency, but these measures will take time to bear fruit. Go to our Argentina inflation page for extra insight.
Monetary Policy
Argentina's monetary policy rate ended 2024 at 32.00%, up from 26.86% a decade earlier. The rates were frequently adjusted upwards, particularly post-2018, as part of attempts to curb soaring inflation and stabilize the peso. By 2023, Argentina had some of the highest policy rates globally, reflecting persistent inflationary pressures and economic challenges. These high rates aimed to control inflation but also posed challenges for economic growth and access to credit. See our Argentina monetary policy page for additional details.
Exchange Rate
Argentina's exchange rate over the last decade was marked by significant depreciation of the Argentine peso against major currencies, particularly the U.S. dollar. Driven by economic instability, high inflation, and fiscal deficits, the peso's value eroded continuously. Government interventions, including currency controls and debt restructuring, provided temporary relief but could not stem the long-term decline. The peso saw a further sharp decline towards the end of 2023 after Javier Milei assumed the presidency and ordered an over-50% devaluation. For more info on the peso, click here.
Economic situation in Argentina
Our panelists expect the economy to have remained on a strong growth trajectory in Q1 as falling inflation, strong real wage growth and liberalizing reforms all boosted economic activity. Available data is largely supportive of this prediction, with economic activity rising sequentially for the fourth straight month in January. That said, dry weather appeared to weigh on exports in Q1; in January–February, exports were roughly flat from Q4. In April, the IMF reached a USD 20 billion deal with Argentina, with a USD 12 billion transfer from the Fund due immediately. The deal will shore up international reserves, allowing the government to lift most capital controls and abolish the crawling currency peg from mid-April. These moves bodes well for private investment, but also risk sharp currency depreciation and a consequent rebound in price pressures.Argentina Economic Forecasts
Projections out to 2034.63 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 58 expert analysts.
Want to get insight on the economic outlook for Argentina in the coming years? FocusEconomics collects projections out to 2034 on 63 economic indicators for Argentina from a panel of 58 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Argentina economy. To download a sample report on the Argentina's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.
Argentina Economic Indicators
Frequently Asked Question about Argentina's Economy
Is Argentina doing well economically?
Why is Argentina's economy so unstable?
What is Argentina's main source of income?
What is the future of Argentina's economy?
Why is inflation in Argentina so high?
Argentina's economy has faced significant challenges in recent years, including high inflation, fiscal deficits, and debt restructuring. The economy has also been in recession for much of the past decade. Economic stability has been elusive, with large fluctuations in the value of the Argentine peso.
Argentina's economy has been historically unstable due to factors like chronic high inflation, fiscal deficits and debt burdens. Frequent changes in economic policies, political instability, and currency devaluations have further contributed to this instability.
Argentina's main source of income is from its service sector, which accounts for more than half of its GDP. This includes activities such as retail, tourism, and financial services. However, agriculture and manufacturing also play important roles in the economy. Argentina is a major exporter of agricultural products, such as soybeans, corn, and beef.
The future of Argentina's economy remains uncertain, with challenges like inflation, fiscal deficits, and debt. The outcome will depend on the effectiveness of economic policies, debt restructuring efforts, and the global economic environment. Deficit reduction and economic liberalization will be crucial for a more prosperous economic future.
Argentina has struggled with high inflation due to a combination of factors, including fiscal deficits, sustained monetary financing of the fiscal deficit and currency devaluations. Frequent changes in economic policies and uncertainty have eroded confidence in the currency, leading to rising prices and a cycle of inflationary pressures.