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. Growth in 2000 was a disappointing 0.8%, as both domestic and foreign investors remained skeptical of the government's ability to pay debts and maintain its fixed exchange rate with the US dollar. One bright spot at the start of 2001 was the IMF's offer of $13.7 billion in support.
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
1% (2000 est.)
Labor Force
15 million (1999)
Electricity production
77.087 billion kWh (1999)
Electricity production by source
Fossil fuel: 60.3%
Hydro: 30.7%
Nuclear: 8.75%
Other: 0.25% (1999)
Electricity Consumption
77.111 billion kWh (1999)
Electricity Exports
1.08 billion kWh (1999)
Electricity Imports
6.5 billion kWh (1999)
Currency
Argentine peso (ARS)
Unemployment Rate
15% (December 2000)
Population Below Poverty Line
37% (1999 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 (2000 est.)
Commercial Bank Prime Lending Rate
Market Value of Publicly Traded Shares
Reserves of Foreign Exchange and Gold
Debt External
$154 billion (2000 est.)
Stock of Direct Foreign Investment at Home
Stock of Direct Foreign Investment Abroad
Exchange Rates
Argentine pesos per US dollar - 1.000 (fixed rate pegged to the US dollar)
