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Argentina at a Glance
Surface:
2 780 400 km2
Population:
40.117.096 (2010)
GDP (PPP, 2011):
725,6 billion USD (CZ: 215,3 billion USD)
GDP per capita (PPP, 2011):
17 700 USD (CZ: 27 400 USD)
HDI:
0,7975 (45th) – Very High
Member of:
UN, OAS, MERCOSUR, UNASUR, WTO, IMF, IAEA, CAN,
CAF, G-20, G24,G-77, GR, ALADI, UL, IDB, IFC, UNCTAD,
UNIDO, OLADE, INTERPOL, WHO, UNESCO, OEI, ABINIA,
WIPO, UNWTO, ICAO, IMO, ITU, UPU, WMO.
Outline
1. Structure of the Argentine economy
2. The Argentine economy in the 21st
century
3. Recent economic evolution within
the context of the international
economic situation
1. Structure of the Argentine economy
Primary Sector
• Argentina’s primary
sector—agriculture,
hunting, forestry, fishing
and mining—represents
16% of GDP.
• Over 60% of its 280 million
hectares dedicated to
agricultural production.
• Leading producer and
exporter of commodities
and raw materials.
No.
Commodity
After
Beeswax
India
Oats
Canada
Lemon and Limes
India & Mexico
Sunflower seeds
Ukraine & Russia
Soybeans
USA & Brazil
Pears
CN, USA & IT
Maize
USA, CN & BR
2
3
4
1. Structure of the Argentine economy
Primary Sector
As a consequence of
investment incentives in the
last decades, the sector has
grown substantially.
Current discussions are in
regards of shale gas. Important
reserves have been discovered
since 2010.
Structure of the Argentine economy
Secondary Sector
• Manufacturing represents
19% of GDP
• Food and beverages sector –
soybean and sunflower oil,
wine.
• Automotive – car assembly,
autoparts
• Biofuel
Structure of the Argentine economy
Service Sector
• The service sector
represents 59% of GDP
• Outsourcing
– 15th destination in the
world
– 2nd in Latin America
• Professional Services
• IT clusters and poles
• Creative Industries
–
–
Bailar fiesta
Braids
• Tourism
Structure of the Argentine economy
Composition of GDP by economic activity (2010)
Teaching, health and
social work
8.8%
Other community
services, social,
personal and
domestic services
Public administration
and defence
4.1%
Agriculture,
livestock, hunting,
forestry and fishing
6.7%
12.2%
Mining and
quarrying
Real estate, renting
and business activities
3.3%
10.4%
Financial
intermediation
Manufacturing
industries
5.5%
19.3%
Transport, storage and
communications
Electricity, gas
and water
8.4%
1.2%
Hotels and restaurants
2.6%
Wholesale and retail
trade and repairs
12.0%
Construction
5.3%
Structure of the Argentine economy
Bilateral Trade
AR Imports
Seatbelt
Breaks and its parts
Lighting for vehicles
Parts/accessories for vehicle bodies
2%
Peanuts
Parts for air conditioning systems
2%
Electric conductors
Locks for
3%vehicles
Dampers
4%
Others
4%
4%
2%
5%
6%
68%
The Argentine economy in the 21st century
The nineties
•
Currency Board
– Convertibility Plan (1ARS = 1USD).
Economic growth and stability, FDI inflows, privatization
•
Year
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
% change
10.3
6.3
5.8
-2.8
5.5
8.1
3.8
-3.4
-0.8
-4.4
BUT also
•
•
Wide “dolarization” of the economy
Current account deficit, Budget deficit, foreign debt
Budget balance as % of GDP
Year
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
% GDP
-0.4
0
-1.4
-2.3
-3.1
-2
-2
-4.1
-3.6
-6.3
The Argentine economy in the 21st century
The nineties
70%
6
4
2
0
-2
-4
-6
-8
-10
-12
-14
-16
60%
50%
40%
30%
20%
10%
0%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Total Debt
Part of debt in foreign currency
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Current account
Trade balance
• Also external shocks
– Mexican crisis (1995), Asian crisis (1997), Russian crisis
(1998), devalvation of Real (1999)
– Appreciation of USD since 1998
Paid interests
The Argentine economy in the 21st century
Struggles in 2001
December
(2000)
Plan “Blindaje” in cooperation with IMF and IBD – Loans in
exchange of austerity during 2001.
June 1st
Conversion bond debt - “Megacanje”
2001
Capital outflows
Since July
Bank Runs
December 1st
Emergency financial measures: corralito, limitation to
capital outflows.
December 5th
IMF announces that will no longer act as a lender
December 20th The President and Minister of Finances quit
December 23rd Argentina announces a debt moratorium
The Argentine economy in the 21st century
Emergency measures to deal with the crisis
• Bank holidays, Foreign Exchange holidays
• Ensure bank liquidity
– Freezing current accounts (Corralito)
– Freezing term accounts (Corralón)
• Stop / limit capital outflows
– Ban of hedging operations in ARS
– Ban of transfer of capital, unless it is due to imports.
– Exporters’ obligation to offer USD.
• Establish a new currency regime
– Dual exchange rate (official & market rate)
The Argentine economy in the 21st century
Long term measures to overcome the crisis
• Assymetric “Pesification” of debts and bank deposits.
• Export Tax
• Negotiations with public service providers
– Avoid a sudden rise in prices
• Social Welfare program
• Managed/dirty float regime
• Foreign debt
– IMF
– Bondholders
The Argentine economy in the 21st century
Economic Impact 2002 - 2008
Total:
153%
Total:
62%
Total:
35%
Recent economic evolution
Thank You!
Embassy of Argentina to the Czech Republic
Panská 6
110 00 Prague 1
www.eches.mrecic.gov.ar
[email protected]