The skyline in Argentina

Argentina Economic Forecast

Argentina Economic Outlook

The economy likely shrank significantly in Q2, buffeted by a destructive drought, hyperinflation, FX restrictions, a plunging peso and rocketing interest rates. GDP has likely continued to fall in Q3 due to the same factors and heightened political uncertainty. Outsider libertarian candidate Javier Milei surprisingly came first in 13 August primary elections for the presidency, followed by the conservative opposition bloc and the ruling Peronist party: The peso plunged following the results amid ensuing political uncertainty. In recent weeks, the government decided to use a USD 7.5 billion disbursement from the IMF to repay part of a currency swap with China, while it also announced a series of handouts for workers and pensioners and promised to exempt millions from income tax in a bid to shore up political support ahead of the 22 October elections.

Argentina Inflation

Inflation dropped to 113.4% in July from 115.6% in June, which had marked the highest rate in the current series. Inflation will surge this year relative to 2022, stoked by a collapsing peso amid monetary financing of the fiscal deficit. Faster-than-expected peso depreciation and fiscal largesse ahead of the October elections are key upside risks.

This chart displays Economic Growth (GDP, annual variation in %) for Argentina from 2013 to 2022.

Argentina Economic Data

2018 2019 2020 2021 2022
Population (million) 44.5 44.9 45.4 45.8 46.3
GDP (USD bn) 525 447 385 487 630
GDP per capita (USD) 11,800 9,942 8,483 10,625 13,606
GDP (ARS bn) 14,745 21,558 27,210 46,346 82,436
Economic Growth (Nominal GDP, ann. var. %) 38.3 46.2 26.2 70.3 77.9
Economic Growth (GDP, ann. var. %) -2.6 -2.0 -9.9 10.7 5.0
Domestic Demand (ann. var. %) -3.7 -8.7 -9.9 13.3 7.8
Private Consumption (ann. var. %) -2.2 -6.1 -12.2 10.4 9.7
Government Consumption (ann. var. %) -1.9 -6.4 -2.0 6.3 1.9
Fixed Investment (ann. var. %) -5.7 -16.0 -13.1 33.8 11.1
Exports (G&S, ann. var. %) 0.6 9.8 -17.4 8.5 5.8
Imports (G&S, ann. var. %) -4.5 -18.7 -17.2 20.4 17.9
Industrial Production (ann. var. %) -5.0 -6.3 -7.5 15.7 4.2
Unemployment (% of active population, aop) 9.2 9.8 11.5 8.8 6.8
Fiscal Balance (% of GDP) -4.9 -3.8 -8.4 -3.6 -3.8
Public Debt (% of GDP) 85.2 89.8 103.9 80.6 85.2
Money (ann. var. of M2 %) 22.8 29.0 78.9 59.5 67.6
Monetary Base (ann. var. %) 40.7 34.5 30.3 47.9 42.4
Inflation (CPI, ann. var. %, eop) 47.6 53.8 36.1 50.9 94.8
Inflation (CPI, ann. var. %, aop) 34.3 53.5 42.0 48.4 72.4
Inflation (WPI, ann. var. %, eop) 73.5 58.5 35.4 51.3 94.8
7-Day LELIQ Rate (%, eop) 59.25 55.00 38.00 38.00 75.00
Central Bank Badlar Rate (%, eop) 48.25 39.44 34.25 34.19 68.81
Stock Market (ann. var. of MERVAL %) 0.7 37.6 22.9 63.0 142.0
Exchange Rate (ARS per USD, eop) 38 60 84 103 177
Exchange Rate (ARS per USD, aop) 28.08 48.25 70.67 95.16 130.86
Current Account Balance (USD bn) -27.1 -3.5 2.7 6.6 -4.3
Current Account Balance (% of GDP) -5.2 -0.8 0.7 1.4 -0.7
Merchandise Trade Balance (USD bn) -3.7 16.0 12.5 14.8 6.9
Merchandise Exports (USD bn) 61.8 65.1 54.9 77.9 88.4
Merchandise Imports (USD bn) 65.5 49.1 42.4 63.2 81.5
Merchandise Exports (ann. var. %) 5.3 5.4 -15.7 42.0 13.5
Merchandise Imports (ann. var. %) -2.2 -25.0 -13.8 49.2 29.0
Foreign Direct Investment (USD bn) 11.7 6.6 4.7 6.8 15.1
International Reserves (USD bn) 65.8 44.8 39.4 39.7 44.6
International Reserves (months of imports) 12.1 11.0 11.2 7.5 6.6
External Debt (USD bn) 278 278 271 267 276
External Debt (% of GDP) 52.9 62.3 70.3 54.8 43.9

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