Economy Overview
Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. However, when President Carlos MENEM took office in 1989, the country had piled up huge external debts, inflation had reached 200% per month, and output was plummeting. To combat the economic crisis, the government embarked on a path of trade liberalization, deregulation, and privatization. In 1991, it implemented radical monetary reforms which pegged the peso to the US dollar and limited the growth in the monetary base by law to the growth in reserves. Inflation fell sharply in subsequent years. In 1995, the Mexican peso crisis produced capital flight, the loss of banking system deposits, and a severe, but short-lived, recession; a series of reforms to bolster the domestic banking system followed. Real GDP growth recovered strongly, reaching 8% in 1997. In 1998, international financial turmoil caused by Russia's problems and increasing investor anxiety over Brazil produced the highest domestic interest rates in more than three years, halving the growth rate of the economy. Conditions worsened in 1999 with GDP falling by 3%. President Fernando DE LA RUA, who took office in December 1999, sponsored tax increases and spending cuts to reduce the deficit, which had ballooned to 2.5% of GDP in 1999. The new government also arranged a new $7.4 billion stand-by facility with the IMF for contingency purposes - almost three times the size of the previous arrangement. Key challenges facing the new government include reforming the country's rigid labor code and addressing the precarious financial situation of several highly indebted provinces.
Agriculture Products
sunflower seeds, lemons, soybeans, grapes, corn, tobacco, peanuts, tea, wheat; livestock
Industries
food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel
Industrial Production Growth Rate
-7% (1999 est.)
Labor Force
15 million (1999)
Electricity production
75.237 billion kWh (1998)
Electricity production by source
Fossil fuel: 42.71%
Hydro: 47.55%
Nuclear: 9.47%
Other: 0.27% (1998)
Electricity Consumption
75.57 billion kWh (1998)
Electricity Exports
250 million kWh (1998)
Electricity Imports
5.85 billion kWh (1998)
Currency
1 peso = 100 centavos
Unemployment Rate
14% (December 1999)
Population Below Poverty Line
36% (1998 est.)
Household Income or Consumption by Percentage Share
Lowest 10%: NA%
Highest 10%: NA%
Budget
Revenues: $44 billion
Expenditures: $48 billion, including capital expenditures of $NA billion (2000 est.)
Commercial Bank Prime Lending Rate
Market Value of Publicly Traded Shares
Reserves of Foreign Exchange and Gold
Debt External
$149 billion (1999 est.)
Stock of Direct Foreign Investment at Home
Stock of Direct Foreign Investment Abroad
Exchange Rates
peso is pegged to the US dollar at an exchange rate of 1 peso = $1
