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.
Heavy economic distortions:Argentina's economy is characterized by multiple exchange rates, restrictions on trade and currency transactions, and a large government footprint, all of which weigh on activity.
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 630 billion in 2022.
Nominal GDP of USD 647 billion in 2023.
GDP per capita of USD 13,865 compared to the global average of USD 10,589.
GDP per capita of USD 13,606 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 0.3% over the last decade.
Sector Analysis
In 2021, services accounted for 68% of overall GDP, manufacturing 17%, other industrial activity 8%, and agriculture 7%. Looking at GDP by expenditure, private consumption accounted for 62% of GDP in 2021, government consumption 15%, fixed investment 17%, and net exports 6%.International trade
In 2021, manufactured products made up 14% of total merchandise exports, mineral fuels 3%, food 54%, ores and metals 0% and agricultural raw materials 1%, with other categories accounting for 28% of the total. In the same period, manufactured products made up 77% of total merchandise imports, mineral fuels 9%, food 8%, ores and metals 4% and agricultural raw materials 1%, with other goods accounting for 1% of the total. Total exports were worth USD 88 billion in 2022, while total imports were USD 82 billion.Main Economic Indicators
Economic growthArgentina's GDP growth over the last decade was highly volatile, marked by economic recessions and brief recoveries. 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 widened significantly over the last decade, exacerbated by economic mismanagement and high inflation. 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
Argentina's unemployment rate over the last decade was characterized by volatility. 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
Over the last decade, Argentina faced rampant inflation that was consistently one of the highest rates in the world, fueled by economic instability, currency devaluation, and monetization of fiscal deficits. 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
Throughout the last decade, Argentina's central bank policy rates saw dramatic changes in response to rampant inflation and economic instability. 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
Monthly economic activity data suggests that the economy rebounded in sequential terms in Q3, despite shrinking at a faster year-on-year pace vs Q2 on a tougher base of comparison. Recovering real wages, stronger credit provision and recent liberalizing reforms likely all supported the economy in the third quarter, though fiscal austerity remained a drag. Our Consensus is for further quarter-on-quarter growth in Q4, though the economy will remain smaller than a year ago. Available signs are positive. In November, consumer confidence rose to its highest level in a year; in October, goods exports boomed by 30% and inflation continued to decline, boding well for consumers’ spending power. In politics, the recent election of Trump as U.S. president could speed up talks with the IMF over a new bailout package—the U.S. is the IMF’s largest stakeholder, and President Milei is a Trump ally.Argentina Economic Forecasts
Projections out to 2034.63 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 55 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 55 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.