01 March 2019 - 18:15
From local industry to international markets
Argentina is moving towards a place among the top 20 global economies
Abundant and extraordinarily fertile land, a globally renowned agricultural and food industry and exciting energy prospects coupled with a growing public debt: this is Argentina, Latin America’s third leading country in terms of GDP and moving towards a place among the top 20 global economies. The country is exposed to a series of volatility factors that, as in all emerging countries, amplify risks and opportunities: continuous evolution in economic and trade policies – from a model based on local industry to one focusing on international markets – and heavy long-standing public debt. The national currency (the peso) is constantly under pressure, leading to rise in inflation. In order to provide further stimulus to the economy, Mauricio Macri’s liberal government has signed an agreement with the IMF for a 57-billion-dollar loan due by 2021. The loan comes on condition of a strict 2019 budget law: the government will commit to cancel debt, bring inflation down to 23 percent, limit currency depreciation to no more than 10 percent and GDP to 0.5 percent and strengthen exportations by 21 percent by the end of next year. At the same time, the Central Bank has launched a system to partially control the exchange, allowing free fluctuations on the dollar only between two levels considered at risk. The president is currently undertaking his last year of mandate. The agreed fiscal deficit goal was successfully accomplished and continues to fall, which will bring greater stability to the country. Argentina’s economic prospects are closely linked to a promising renewable energy sector and a dynamic agricultural and food industry which depends on the country’s extremely fertile land: the country is spread over roughly 2.8 million square kilometres and has a low population density, especially in rural areas. Some 92 percent of Argentinians live in cities, 38.9 percent of which in the so-called Greater Buenos Aires, the metropolitan area surrounding the capital. The country’s population is relatively old, as shown by the 2010 census data population pyramid: 14.3 percent of Argentinians are over 65 years old, while the range of 0 to 14-year olds is gradually decreasing from 28.3 percent in 2001 to 25.5 percent in 2010. Along with Chile, Cuba and Uruguay, Argentina is among the group of Latin American countries considered to be undergoing a modern demographic transition of moderate birth and death rates and a total growth of 1.14 percent from 2001-2010.