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Argentina
Summary
Moody’s B3 / S&P B- / Fitch B1
Economy: Agriculture 11%, Industry 29%, Services 60%
Argentina benefits from a large, diversified economy and a sizable, highly educated middle class. 2016
was a transformational year, as newly elected President Mauricio Macri tackled economic imbalances
from more than a decade of mismanagement. The country settled a dispute with holdout creditors from
its 2001 default, regained access to capital markets, eliminated exchange rate restrictions, and embarked
on an economic reform program. Macri also built alliances with political opponents, increased transparency, improved the quality of statistics, strengthened institutional independence, and restored the
balance of power between the executive and legislative branches, resulting in upgrades from the three
main credit rating agencies. Despite progress, growth remains lackluster and persistent inflation threatens
the recovery. Moreover, the government’s efforts to stem fiscal deterioration have been disappointing, as
Macri favors a go-slow approach to maintain political support. Midterm elections in October 2017 may
help strengthen the president’s mandate and accelerate the pace of fiscal consolidation.
Economic Indicators
Population (Millions)
GDP per Capita (USD)
Nominal GDP (USD Billions)
2012
2013
2014
2015
2016F
41.7
42.2
42.7
43.1
43.6
2017F
44.0
13,891
14,485
13,225
14,628
12,824
13,756
605.9
579.7
611.3
564.3
630.9
559.0
Real GDP (%)
-1.0
2.4
-2.5
2.5
-2.0
3.1
Year-End CPI (%)
10.8
10.9
23.9
26.5
40.0
23.7
Fiscal Balance (% of GDP)
-2.4
-2.9
-4.1
-6.2
-5.3
-5.3
Interest (% of Revenues)
5.0
2.3
2.7
4.4
6.6
7.0
FC Debt/Public Debt (%)
61.7
64.5
66.7
69.1
71.0
68.7
Government Debt (% of GDP)
39.4
42.2
43.6
52.1
51.8
51.1
151.5
161.7
169.6
191.5
201.6
199.6
Current Account (% of GDP)
-0.2
-2.0
-1.4
-2.5
-2.7
-2.8
FDI (% of GDP)
2.5
1.5
0.6
1.8
1.2
1.6
External Debt (% of GDP)
27.1
25.0
27.8
25.2
31.7
32.5
Foreign Reserves/External Debt (%)
27.6
20.0
20.0
16.1
19.0
18.5
Foreign Reserves (Mo. of imports)
6.2
4.1
4.8
4.1
5.3
5.4
Foreign Reserves (% of GDP)
7.5
5.0
5.6
4.1
6.0
6.0
Government Debt (% of Revenue)
As of November 2016
Forecasted or estimated results do not represent a promise or guarantee of future results and are subject
to change
Source: CB of A, Ministry of Finance, NSI, IMF, Haver Analytics, Bloomberg, Lazard
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Rating History
Below is a history of the country’s foreign and local currency ratings by the major agencies
dating back to 2000. We have also included a chart of the country’s hard currency external
debt spread and the JP Morgan EMBI Global Diversified Index spread for comparison.
Rating History
Hard Currency
BB+
BB
BBB+
B
BCCC+
CCC
CCCCC
C
D
Local Currency
AAA+
A
ABBB+
2000
2008
Moody’s
2016
S&P
Fitch
BBB
2000
2008
Moody’s
S&P
2016
Fitch
As of December 2016
Performance represents past performance. Past performance is not a reliable indicator of future results.
Source: Fitch, Moody’s, Standard and Poor’s, Bloomberg
Bond Spreads
2000
1600
1200
800
400
0
2008
2010
Argentina
2012
2014
2016
EMBIGD
As of December 2016
Performance represents past performance. Past
performance is not a reliable indicator of future
results.
Source: JP Morgan
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Argentina
Strengths
Large, Diversified, and Relatively Wealthy Economy
Argentina ranks among the wealthiest emerging market countries on a per capita basis and
benefits from one of the highest levels of human development, particularly in terms of
education.2 The economy is well diversified with a vibrant agricultural sector, which has
made significant technological and productivity advances over the past several years; a welldeveloped manufacturing sector, including vehicle manufacturing; and abundant natural
resources, including natural gas and oil. Argentina is South America’s largest producer of
natural gas.3
Favorable Creditor Composition for Public Debt
Following the default of 2001, years of high real GDP growth and closed access to the
international capital markets resulted in a sharp reduction of Argentina’s public and external
debt ratios. With the slowdown in growth over the past few years, the trend has reversed,
though in terms of GDP, the stock of public debt is still moderate. Prior to regaining access
to international capital markets in April 2016, 57% of public debt was held by government
agencies, including the social security agency. Therefore, debt owed to the private sector,
both domestic and external, was equal to 16.5% of GDP, and public-sector foreign currency
debt amounted to about 36% of GDP.4 As a result, rollover risk is low in Argentina. That
said, a sharp decline in foreign exchange reserves has increased vulnerabilities to a balance of
payments crisis. Moreover, the public sector, including provinces, issued more than US$20
billion in external debt in 2016, and issuance is expected to continue growing in the coming
years. Nevertheless, Argentina’s public sector debt and external debt amount to about 50%
and 30% of GDP, respectively, which is considered manageable by international standards.5
New Government, New Economic Policies
President Macri, who took office in December 2015, is addressing the economic imbalances
created by the market-unfriendly policies of former President Cristina Kirchner. The new
government moved quickly to tighten fiscal and monetary policy, eliminate capital and price
controls, lift exchange-rate restrictions, and improve transparency. The administration also
finalized in April 2016 an agreement with holdout creditors that allowed Argentina to cure
the country’s default and regain access to international capital markets. The government
announced several measures to reduce the fiscal deficit, including the partial removal of subsidies that amounted to 5% of GDP, and a 30% limit on wage increases to control real wage
expenditure growth. However, legal challenges to the subsidy reductions and pushback from
the labor movement have forced the government to slow the pace of fiscal consolidation. The
2016 primary fiscal deficit target was revised to 4.8% of GDP, compared to an initial target
of 3.3% and a primary deficit of 5.0% in 2015. The fiscal adjustment is projected to be more
gradual going forward, with primary deficit targets of 4.2%, 3.0%, and 1.6% from 2017 to
2019, respectively. Lowering the fiscal deficit should lead to a reduction in money printing,
which should ease inflationary pressures. The central bank reduced the amount of transfers to
the federal government and tightened monetary policy, resulting in positive real interest rates
for the first time in years. The monetary base grew at an annual rate of 27.7% in September
2016, compared to 40.1% in December 2015.6 In addition, a new monetary policy operational framework, including an inflation-targeting regime and new benchmark policy rate, is
scheduled to be implemented in January 2017. These measures should increase transparency
and help anchor inflation expectations—the government has projected that inflation will fall
to 20%–25% by year-end 2016, 12%–17% in 2017, 8%–12% in 2018, and 5% in 2019.
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Settlement with Holdouts
In April 2016, the government finalized an agreement with the majority of holdouts from
the 2005 and 2010 debt exchanges and issued US$16.5 billion of 3-, 5-, 10-, and 30-year
sovereign bonds, with part of the proceeds used to pay the holdouts and resolve the country’s
default. The resolution of the holdouts issue cleared the way for the three main credit rating
agencies to upgrade Argentina. Regaining access to international capital markets signaled
Argentina’s reengagement with global financial markets and will help the country cover
its financing needs going forward. The settlement with holdouts has improved investor
confidence, which should have positive consequences for economic growth, the balance of
payments, and, indirectly, the fiscal position—both in terms of higher revenues resulting
from stronger growth and easier access to more affordable financing. Following its initial
bond issuance, Argentina has continued to tap international capital markets, in dollars and in
other foreign currencies. The country’s provinces have also issued debt. The issuance is small
relative to the size of the economy, although the ramp-up has triggered some concerns about
oversupply. The new dollar-denominated sovereign bonds were added to the JP Morgan
Emerging Markets Bond Index – Global Diversified, which created demand from investors
benchmarked to the index.
Reengagement with the Global Community and
Domestic Rivals
In addition to quickly reaching an agreement with holdout creditors and regaining access to
international capital markets, the Macri administration moved to repair other relationships,
both domestically and abroad. Shortly after taking office, President Macri traveled to the
World Economic Forum meetings in Switzerland at the beginning of 2016. In a symbol of
national unity, Macri invited one of his rivals for the presidency to accompany him to Davos.
The new president has also focused on reestablishing a relationship with the International
Monetary Fund and invited the Fund to travel to Argentina to conduct the first Article IV
evaluation of the economy in years. The publication of the Article IV report opens the possibility of an IMF agreement if the government decides to further enhance its credibility
with the international financial market. Macri has also expressed an interest in negotiating
Argentina’s entry into the Organization for Economic Co-operation and Development.
Domestically, Macri’s party controls only a fraction of both the Chamber of Deputies and
the Senate, so the president has worked to establish good relations with governors of all
parties (who have strong influence over Congress). He has also reached out to factions of the
divided opposition to garner congressional support for his initiatives. Midterm elections are
scheduled for October 2017, and although Macri’s small political party is unlikely to secure
a congressional majority, he could strengthen his mandate if his party performs well in
key provinces.
Weaknesses
Weak Institutions
The Macri administration inherited institutions whose independence and transparency were
compromised by the previous two governments. Under the presidencies of Nestor Kirchner
and Cristina Kirchner, Argentina experienced a major deterioration in international indicators of institutional strength. For example, in 2015, Argentina ranked 163rd of 215 countries
included in the World Bank’s Rule of Law index, down from 109 out of 201 countries in
2000. The Kirchners effectively destroyed the independence of key government institutions
and public entities, including the central bank, the public pension system, and the national
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Argentina
statistic and census agency, Instituto Nacional de Estadística y Censos (INDEC), which
grossly misreported economic data, particularly inflation and real GDP growth, during their
tenure. The Kirchners also weakened the established local media by directing state advertising
funds to smaller rivals and outlets that backed their policies, thus reducing freedom of expression. The incoming government is working to reverse these measures, but it will probably
take more than one presidential term to improve the institutional strength of these entities.
Some progress has already been made at the central bank and INDEC, which should help
improve transparency and the quality of economic data.
Delicate Economic Conditions
Despite the reforms President Macri has put in place, Argentina’s economic situation continues to be delicate, owing to the market-unfriendly and unsustainable economic policies
carried out by the Kirchners for more than a decade. These policies included aggressive fiscal
and monetary expansion, capital and price controls, a lack of respect for private contracts, the
misrepresentation of economic statistics, and an antagonistic relationship with the IMF and
international investors that left the country without access to international capital markets for
many years. Currently, Argentina’s inflation rate is among the highest in the world, and the
fiscal deficit amounts to more than 5% of GDP. Under the Kirchners, budget shortfalls were
partially financed by printing money, resulting in monetary expansion and elevated prices.
The lack of trust in the economic model resulted in billions of dollars of capital flight, putting
pressure on foreign reserves despite low current account deficits. Macri has put in place an
amnesty to encourage Argentines to report the assets they hold abroad, and the initial results
are encouraging, with more assets being reported than expected, which should help to boost
the government’s fiscal revenues. However, the economy is recovering more slowly than
expected, and legal challenges to reductions in fuel subsidies, coupled with pushback from
labor unions against government efforts to curb salary increases, have forced the government
to slow the pace of fiscal adjustment. Argentines are more optimistic since Macri took office,
but more evidence of an economic recovery is needed to fully regain the confidence of the
private sector.
Governability
President Macri’s small political party controls only 16% of the seats in the Chamber of
Deputies and 8% of Senate seats. Coalitions with other smaller parties have increased the
president’s congressional support somewhat, but he still faces the formidable challenge of
maintaining the relatively high approval ratings needed to move forward with his economic
program and perform well in the October 2017 midterm congressional elections in order
to consolidate the reforms. In his first weeks in office, Macri successfully passed a series of
unpopular reforms, using his political capital from the election victory to negotiate support
from important allies within the opposition, including factions of the divided opposition
Peronist party, which controls the largest number of congressional seats. Macri’s popularity
has fallen since he took office but remains high at about 50%. However, his policies have
already dented his popularity among public-sector workers, who went on strike at the end of
February to protest inflation and job cuts. The president’s approval ratings could fall sharply
if inflation does not begin to decline more rapidly and real GDP growth accelerate more
quickly by the first half of 2017.
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Lazard Emerging Markets Debt
Monetary and Exchange-Rate Policy
Inflation/Monetary Policy
The Banco Central de la Republica Argentina (BCRA) has a dual mandate: to maintain
monetary stability and equitable economic development. Monetary stability is the primary
objective, defined as low inflation and a stable value of the currency. To implement this mandate, BCRA adopted an inflation-targeting regime in 2016. The long-run inflation target is
set as 5% ±1.5%, starting in 2019. Monetary policy decisions are made by the BCRA board,
made up of 10 members—the Governor, Deputy Governor and eight board members—who
are nominated by the President of Argentina and confirmed by the Senate for a six-year
term, with no term limits. Board members must be Argentine citizens—either by birth or
naturalization with at least 10 years of citizenship—and must have demonstrated experience
in monetary affairs, banking, or financial markets law. Board members cannot concurrently
be government officials or public-sector employees, nor corporate board members of any
financial service company. The president of Argentina can remove board members after consultation with a special Congressional commission overseen by the president of the Senate,
and constituted by the presidents of the Budget and Economic committees in the Senate
and presidents of the Budget and Finance committees in the Lower House. In addition to
monetary policy, BCRA is tasked with maintaining financial stability and managing a
foreign exchange.
BCRA’s primary tool for implementing monetary policy is the rate on 35-day central bank
notes (LEBAC), but on 30 December 2016, the BCRA was scheduled to update its framework for monetary policy implementation. It is expected that in 2017, BCRA will be shifting
to the 7-day (reverse) repo rate, which is the most relevant interest rate for open market operations in the interbank market. BCRA monetary policy decisions are set during weekly policy
meetings held every Tuesday, but this schedule is expected to shift to monthly meetings over
time—perhaps as early as 2017. While the BCRA cannot directly impact inflation, there are
three main transmission channels of monetary policy currently available: the credit channel
(which is quite weak given limited credit penetration in the economy), the expectations channel, and the exchange-rate channel. These all impact inflation indirectly through change in
aggregate macroeconomic conditions. The asset price channel—typically an additional channel of monetary policy transmission—is not yet available given limited development of the
domestic financial market.
The track record and the outlook for BCRA meeting the inflation target seems, at best,
mixed. On the road to the long-run inflation target, the BCRA announced intermediate
inflation targets to guide policy and inflation expectations. BCRA announced an inflation
target range of 20% to 25% for the fourth quarter of 2016 and 12% to 17% for the fourth
quarter of 2017. So far, the BCRA is looking increasingly likely to miss both, though this
may be somewhat open to interpretation. Given interruptions in the publication of official
inflation statistics, no annual comparisons are available. Monthly annualized inflation is averaging 15.8% in the three months through October 2016, but 32.9% in October. Alternative
measures of inflation—such as the City of Buenos Aires or the San Luis Province inflation
indices—point to inflation between 40.0% to 44.7%, year over year in October. At the same
time, one-year-ahead inflation expectations are at 20%. In this context, the monetary stance
implied by the central bank’s policy rate (35-day LEBAC) at 26.25% is open to interpretation. When compared to expected inflation, the policy stance can be judged as somewhat
restrictive, but when compared to current pace or realized annual inflation, it is not. This
makes it more challenging to assess the likelihood of convergence to target in 2017.
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Looking ahead to 2017, we see upside risks to both inflation and interest rates. While median
inflation expectations for 2017 have been fairly stable at around 20% since the inception
of the survey in June 2016, there are two upside risks to that outlook. First, given realized
inflation in the 40%–45% range, wage negotiations in the first quarter of 2017 present an
important upside risk to the inflation outlook. If wage negotiations were to result in salary
increases at 30% or more, the BCRA would have a very hard time guiding inflation down to
the 12%–17% target. Second, regulated price adjustments are expected at the start of 2017,
which will put additional upward pressure on inflation—at least in the short run. In this context, the BCRA’s decision to continue cutting the policy rate—from 38% in March 2016 to
26.25% in October 2016—may be putting its ability to achieve the inflation target in 2017
at risk. Should these upside risks to inflation and inflation expectations materialize, we expect
the BCRA to reverse course and tighten monetary policy by hiking rates.
Exchange-Rate Policy
The Argentine Peso (ARS) is a non-convertible currency that has traded in a managed floating
exchange-rate regime since 1999. The BCRA intervenes in the spot market but also through
derivatives with the goal to build reserves and smooth price volatility. In addition, the BCRA
has used capital controls as a tool for exchange-rate intervention.
During 2016, the ARS maintained a modest depreciation trend, after a large devaluation
in December 2015. In mid-December 2015, the authorities devalued the peso by 27% to
around 13.3/USD, removed most capital and import controls (except a 120-day holding
period for foreign portfolio investment in Argentina), and pursued a largely non-interventionist approach to the currency. Significant debt issuance prompted large foreign currency
inflows, which limited exchange-rate depreciation, despite very high inflation. The ARS
depreciated an additional 20% since the mid-December 2015 devaluation, to nearly 16 in
early December. This large depreciation during the preceding 12 months helps explain the
significant pickup in inflation, despite some tightening of monetary and fiscal policy.
Looking ahead to 2017, we expect the ARS to maintain a bias toward depreciation, but
by less than what is implied by the forward market. The ARS is one of the highest carry
currencies in the world, with a 3-month implied yield of around 20% to 30%. The central
bank survey of expectations puts the ARS at 18.2 at the end of 2017, a 16% depreciation.
We expect the currency to depreciate by less, probably similar to the 2016 depreciation of
10%–15%, as BCRA will need to ensure currency stability to anchor inflation expectations.
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Inflation
USD/ARS
50
16
40
13
30
10
20
7
10
4
0
1
2000
2008
Inflation
2016
Reference Rate
As of December 2016
Source: Bloomberg
REER
150
120
90
60
30
0
2000
2008
2016
REER
Median since Dec 2000
Median last 5 yrs
Median last 10 yrs
As of December 2016
Source: JP Morgan, Lazard
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2000
2008
2016
Argentina
Country Background
Size
2,780,400 KM2 (8th)
Capital
Buenos Aires
Population
43.9 Million
Ethnic Groups
White (Mostly Spanish and Italian) 97%
Religion
Roman Catholic 92%, Protestant 2%, Jewish 2%
Median Age
31.5 Years
Literacy Rate
98.1%
Independence
July 1816
Political System
Federal Representative Presidential Republic
Presidents
Mauricio Macri
Presidential Election
2019
Legislative Elections
2017
Legislative Branch
Bicameral National Congress
Economy
Agriculture 10.9%, Industry 29.3%, Service 59.7%
Labor Force
Agriculture 5%, Industry 23%, Service 72%
Merchandise Exports
Soybeans, Vehicles, Petroleum, Gas, Corn, Wheat
Export Partners
Brazil 17%, China 9%, US 5.5%
Currency
Peso (ARS)
As of November 2016
Source: CIA
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Country Timeline
The Falklands War
1982
April—Argentine forces occupy the British-held Falkland Islands, which Argentina calls Islas
Malvinas and over which it had long claimed sovereignty. The United Kingdom dispatches a
force to re-take the islands, which it does in June. More than 700 Argentines are killed in the
fighting. Galtieri is replaced by General Reynaldo Bignone.
1983
Argentina returns to civilian rule. Raul Alfonsin becomes president. Argentina begins to investigate the 'Dirty War' and charge former military leaders with human rights abuses. Inflation is
running at more than 900%.
1989
Carlos Menem of the Peronist party is elected president. He imposes an economic austerity
programme.
1990
Full diplomatic relations with the United Kingdom are restored, with Argentina still maintaining
its claim to the Falklands.
1992
Argentina introduces a new currency, the peso, which is pegged to the US dollar. A bomb is
placed in the Israeli embassy, 29 people are killed.
1994
A Jewish community centre in Buenos Aires is bombed. 86 people are killed and more than
200 injured.
1995
Menem is re-elected.
1996
Finance Minister Domingo Cavallo is dismissed. Economic hardship leads to a general strike
in September.
1997
A judge in Spain issues orders for the arrest of former Argentine military officers on charges
of participating in the kidnapping and killing of Spanish citizens during the 'Dirty War'.
Argentine amnesty laws protect the accused.
1998
Argentine judges order arrests in connection with the abduction of hundreds of babies from
women detained during the 'Dirty War'.
Recession starts
1999
Fernando de la Rua of the centre-left Alianza opposition coalition wins the presidency, inherits
114 billion-dollar public debt.
2000
Strikes and fuel tax protests. Beef exports slump after an outbreak of foot-and-mouth disease. Soya exports suffer from concerns over the use of genetically modified varieties. The
IMF grants Argentina an aid package of nearly 40 billion dollars.
2001
February—Argentina recalls its ambassador to Cuba after President Castro accuses Argentina of
'licking the yankee boot'. Castro made the remarks in an apparent reference to Argentina's support for US condemnation of Cuba's record on human rights. Argentina and the United Kingdom
agree that Argentine private aircraft and vessels may now visit the Falkland Islands again.
2001
March—President de la Rua forms a government of national unity and appoints three finance ministers in as many weeks as cabinet resignations and protests greet planned austerity measures.
2001
July—Former president Carlos Menem is charged with heading an 'illicit organisation' that
violated international arms embargoes against Croatia and Ecuador in the early 1990s. A
court throws out all arms trafficking charges against Menem, freeing him after five months of
house arrest.
2001
July—Much of the country is brought to a standstill by a general strike in protest against
proposed government spending cuts. Country's credit ratings slip.
Return of the Peronists
2001
October—The opposition Peronists take control of both houses of parliament in
Congressional elections.
2001
November—President de la Rua meets US President George W Bush in a last-ditch attempt
to avoid an economic crash in Argentina. Share prices reach record lows.
2001
December—Economy Minister Cavallo announces sweeping restrictions to halt an exodus of
bank deposits. The IMF stops $1.3B in aid.
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Argentina
2001
December—A 24-hour general strike is held in protest at curbs on bank withdrawals, delayed
pension payouts and other measures.
2001
December—President Fernando de la Rua resigns after at least 25 people die in street protests
and rioting.
2001
December—Adolfo Rodriguez Saa named new interim president. He resigns on 30
December, citing a lack of support within his party.
2002
January—Congress elects Peronist Senator Eduardo Duhalde as caretaker president. Within
days the government devalues the peso, ending 10 years of parity with the US dollar.
2002
April—Banking and foreign exchange activity suspended; Duhalde says the financial system
could collapse.
2002
June—Two killed in anti-government and IMF protests in Buenos Aires. The protesters,
known as 'piqueteros', are highly organised groups of unemployed who block the main road
bridges into the capital.
2002
July—Duhalde calls early elections for March 2003, later put back to April, to try win public
support for the government's handling of the economic crisis.
2002
November—Argentina defaults on an $800m debt repayment to the World Bank, having failed
to re-secure IMF aid. The World Bank says it will not consider new loans for the country.
Kirchner sworn in
2003
May—Nestor Kirchner sworn in as president. Former President Carlos Menem gained most
votes in first round of elections but pulled out before second round.
2003
August—Congress, Senate vote to scrap laws protecting former military officers from prosecution over human rights abuses during military regime.
2003
September—After weeks of negotiations Argentina and IMF agree on debt-refinancing deal
under which Buenos Aires will only pay interest on its loans.
2004
April—Judge issues international arrest warrant for former President Carlos Menem, over
allegations of fraud.
2004
September—Court clears five men accused of involvement in 1994 bombing of Jewish
centre in Buenos Aires.
2004
December—Former President Carlos Menem returns from self-imposed exile in Chile after
two arrest warrants are cancelled. 188 people are killed and around 700 are injured in a fire at
a Buenos Aires nightclub.
2005
March—President Kirchner declares the restructuring of the country's debt to be a success.
Argentina offered to exchange more than $100B in defaulted bonds.
2005
June—Supreme Court scraps an amnesty law protecting former military officers suspected
of human rights abuses during military rule between 1976 and 1983.
2005
November—Argentina hosts the 34-nation Summit of the Americas, an event accompanied
by sometimes-violent protests against free trade and US President Bush.
2006
January—Argentina repays its multi-billion-dollar debt to the IMF.
2006
May—Citing environmental concerns, Argentina files a complaint against the construction of
two pulp mills in neighbouring Uruguay at the International Court of Justice in The Hague. The
court rules in July that the project can continue.
2006
October—Violence mars the reburial of former President Juan Domingo Peron at a new mausoleum outside Buenos Aires.
2007
January—Spanish police arrest former President Isabel Peron in connection with an Argentine
investigation into the activities of right-wing paramilitaries in the 1970s. Fernandez elected.
2007
October—Former Roman Catholic police chaplain Christian Von Wernich is convicted of collaborating in the murder and torture of prisoners during the 'Dirty War'.
Cristina Fernandez de Kirchner is elected president, succeeding her husband
Nestor Kirchner in the post
2007
December—Cristina Fernandez de Kirchner sworn in as president.
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2008
April—A Spanish court rejects a request from Buenos Aires to extradite former Argentine
president Isabel Peron, wanted for alleged human rights abuses.
2008
July—President Fernandez cancels controversial tax increases on agricultural exports which
sparked months of protests by farmers.
2008
August—Two former generals are sentenced to life imprisonment for their actions during the
period of Argentina's military rule–known as the Dirty War–during the 1970s and 1980s.
2008
November—Lower house of parliament approves government's controversial plan to nationalise pension funds. President Fernandez says the move is necessary to protect pensioners'
assets during the global financial crisis.
2009
January—Government declares state of emergency over worst drought in decades.
2009
February—Farmers threaten to halt livestock and grain sales in protest at agricultural export
taxes.
2009
July—Legislative elections result in President Fernandez's Peronist party losing its absolute
majorities in both houses of parliament.
Row with UK
2009
April—Argentina hands documents to UN formally laying claim to a vast expanse of the
ocean, as far as the Antarctic and including island chains governed by Britain.
2009
March—Britain rejects calls from Argentina for talks over the future sovereignty of the
Falkland Islands.
2009
December—Argentine parliament passes law claiming Falkland Islands and several other
British overseas territories in the area.
2010
February—Argentina imposes new controls on ships passing through its waters to Falkland
Islands in response to plans by a British company to drill for oil near the islands.
2010
July—Argentina becomes first country in Latin America to legalise same-sex marriage.
2010
October—Ex-President Nestor Kirchner, the president's husband and predecessor, dies. He
was seen as a key presidential contender for 2011.
2010
December—Exploration firm says it fails to find oil at Falkland Islands. Former military ruler
General Jorge Videla is sentenced to life in prison for crimes against humanity.
2011
October—Benefiting from strong economic growth, President Cristina Fernandez de Kirchner
wins a second term with a landslide 54% of the vote. Former naval officer Alfredo Astiz and
11 other former members of the security forces are given life sentences for crimes against
humanity committed during the 1976-83 period of military rule.
2011
December—As the 30th anniversary of Argentina's invasion of the Falkland Islands approaches,
tensions with Britain increase after Buenos Aires persuades members of the South American
trading bloc Mercosur to close their ports to ships flying the Falkland Islands flag.
2012
February—Argentina makes an official complaint to the UN that Britain is "militarising" the
area around the Falkland Islands after the UK announces that it is sending one of its newest
destroyers to the region. Argentina also accuses Britain of sending a nuclear-armed submarine to the area. British officials discuss the accusations as "absurd".
2012
May—The European Union files a suit against Argentina's import restrictions at the World
Trade Organisation (WTO) in a row over Argentina's nationalisation of energy company YPF,
which was majority owned by Spain's Repsol.
2012
July—Former military rulers Jorge Videla and Reynaldo Bignone are sentenced to long prison
terms for overseeing the theft of babies from political prisoners during military rule in 19761983. They are both already serving long terms for other crimes during their rule.
2012
July—Two former junta leaders found guilty of overseeing the systematic theft of babies
from political prisoners during 1976-1983 dictatorship. Jorge Videla and Reynaldo Bignone
sentenced to 50 and 15 years in prison respectively. Trial follows years of campaigning by
rights group Grandmothers of the Plaza de Mayo, which says 500 children stolen and raised
by families close to the regime.
2012
September—The International Monetary Fund warns Argentina it could face sanctions unless
it produces reliable growth and inflation data by mid-December. Economists say annual inflation in Argentina is running at 24%, much higher than the official 10% figure.
358
Argentina
2012
November—Congress approves a law to lower the voting age to 16. The government says
it is an extension of democracy that will enfranchise more than a million young voters.
President Fernandez is courting the youth vote, and critics say the change
is designed to boost her party's chances in the key mid-term congressional elections in 2013.
2013
January—Argentina and Iran agree to set up a joint commission to investigate the 1994
bombing of a Jewish community centre in Buenos Aires, despite Argentine courts having
blamed Iran for the attack in which 85 people died.
2013
March—Falkland Islanders vote overwhelmingly in favour of remaining a British overseas
territory. Argentina describes the referendum as pointless. Cardinal Jorge Mario Bergoglio
of Buenos Aires is chosen as Pope. He is the first Latin American to lead the Roman Catholic
Church and takes the name of Francis.
2013
October—President Fernandez's Front for Victory loses control of several key provinces,
including Buenos Aires, in mid-term elections, but retains its majority in Congress.
2014
January—Argentina relaxes its strict foreign exchange controls, after the peso suffered its
steepest decline in 12 years.
2014
July—Argentina defaults on its international debt for the second time in 13 years, after failing
to resolve its differences with US hedge funds that hold 1.3B dollars worth of bonds, bought
at a discount after the country last defaulted.
2014
September—Argentina's Congress approves a bill to restructure the country's debt and sidestep a recent US court ruling that caused Argentina to default.
2014
October—Court gives life sentences to fifteen people for their involvement in the running of a
detention and torture centre in the city of La Plata during military rule in the 1970s
2014
December—Reynaldo Bignone, Argentina's last military ruler already in jail for crimes against
humanity, is sentenced for the theft of babies born during the years of dictatorship in the
1970s and 80s.
2015
January—Prominent prosecutor Alberto Nisman is found dead in mysterious circumstances,
after accusing the government of a cover-up over the country's worst terrorist attack - the
1994 bombing of a Jewish community centre in Buenos Aires that left 85 people dead.
President Fernandez announces plans to dissolve the country's intelligence agency, and suggests that rogue agents were involved in Mr Nisman's death.
2015
February—Judge dismisses Prosecutor Nisman's case against President Fernandez for lack
of evidence.
2015
November—Conservative Mayor of Buenos Aires Mauricio Macri beats Peronist Daniel Scioli
in run-off presidential election.
2016
February—Argentina agrees to settle multi-billion-dollar dispute with US hedge funds over
bond repayments, which had restricted the country's access to international credit markets..
Source: BBC
359
Lazard Emerging Markets Debt
Notes
1 As of November 2016.
2 Argentina ranks 40th among 185 countries on the United Nation’s Human Development Index. Source:
“2015 Human Development Report,” United Nations, http://hdr.undp.org/en/composite/HDI.
3 “Argentina Country Analysis,” US Energy Information Administration, http://www.eia.gov/beta/international/
country.cfm?iso=ARG.
4 As of December 2015. Source: Lazard Asset Management and “Argentina: 2016 Article IV Consultation,”
International Monetary Fund, IMF Country Report No. 16/346,” November 2016, http://www.imf.org/external/pubs/ft/scr/2016/cr16346.pdf.
5 “Argentina: 2016 Article IV Consultation,” International Monetary Fund, IMF Country Report No. 16/346,”
November 2016, http://www.imf.org/external/pubs/ft/scr/2016/cr16346.pdf.
6 “Informe de Política Monetaria,” Banco Central de la República Argentina, October 2016, http://www.bcra.
gov.ar/Pdfs/PoliticaMonetaria/IPOM_Octubre_2016.pdf.
360
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