I. Argentina Overview
A. Country Data:
Country Name |
Argentina |
Government System |
Republic |
Capital |
Buenos Aires |
Administrative divisions |
23 provinces and 1 federal district |
Population |
40 million |
Population Growth Rate |
1.00% |
Religion |
Roman Catholic 92%, Protestant 2%, Jewish 2%, other 4% |
Language |
Spanish |
Currency |
Peso |
Fiscal Year |
Calendar Year |
B. Domestic Economy:
GDP (2005) |
US$ 183.8 billion |
GDP Real Growth Rate, % - 2005 |
9.2% |
GDP per capita |
US$ 13,700 |
GDP per capita - purchasing power parity |
US$ 14,109 |
Inflation % (per annum) |
11.3 % |
Unemployment %, end of period |
12.1% |
Trade Balance |
US$12.4 billion |
FX Rate (per annum average) |
3.10 (January 2007) |
Interest Rate (% p.a. average) |
6% (November 2006) |
C. Government:
Executive branch |
Chief of State |
- President Néstor Kirchner ,
- Vice President Daniel Scioli. |
Legislative branch |
Bicameral National Congress |
- Federal Senate: 72 seats; formerly, three members appointed by each of the provincial legislatures; presently transitioning to one-third of the members being elected every two years to six-year terms
- Chamber of Deputies: 257 seats; one-half of the members elected every two years to four-year terms |
Judicial branch |
Supreme Federal Tribunal
Higher Tribunal of Justice
Regional Federal Tribunals |
9 Supreme Court judges are appointed by the president with approval of the Senate.
Judges are appointed for life. |
* Note - the president is both the chief of state and head of government.
Sources: Central Bank/ Ministry of Foreign Relations, International Trade and Culture/ Ministry of Economy and Production
|
Buenos Aires Aerial View |
II. Economy Overview
Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. Over the past decade, however, the country has suffered problems of inflation, external debt, capital flight, and budget deficits.
Growth in 2000 was a negative 0.8%, as both domestic and foreign investors remained skeptical of the government's ability to pay debts and maintain the peso's fixed exchange rate with the US dollar. The economic situation worsened in 2001 with the widening of spreads on Argentine bonds, massive withdrawals from the banks, and a further decline in consumer and investor confidence. Government efforts to achieve a "zero deficit," to stabilize the banking system, and to restore economic growth proved inadequate in the face of the mounting economic problems. The peso's peg to the dollar was abandoned in January 2002, and the peso was floated in February.
The exchange rate plunged and real GDP fell by 10.9% in 2002, but by mid-year the economy had stabilized, albeit at a lower level. GDP expanded by about 9% per year from 2003 to 2005. Growth is being led by a revival in domestic demand, solid exports, and favorable external conditions. The government boosted spending ahead of the October 2005 midterm congressional elections, but strong revenue performance allowed Argentina to maintain a budget surplus. Inflation has been rising steadily and reached 12.3 percent in 2005.
III. Foreign Direct Investment *
The largest sources of FDI in Argentina have been the United States (36%, 1994–2000) and Spain (11.9%). Other important sources of FDI have been France (11%), Chile (9.8%), Italy (7.1%), the United Kingdom (6.2%), Canada, and Japan. The major destinations for FDI from 1999 to 2002 were the oil industry, telecommunications, supermarkets, the automotive industry, energy, construction, banks, insurance, chemicals, and the food industry.
Although Argentina remains a net recipient of FDI, Argentinean firms have recently begun making substantial outward investments regionally, in Brazil, Paraguay, and Uruguay. The peak year for the outward flow FDI was 1997, $3.65 billion up from $1.6 billion in 1996. In the recession that gripped the economy from 1998, outward FDI fell to $2.3 billion in 1998, to $1.3 billion in 1999, and $1.1 billion in 2000, according to the latest available UNCTAD estimates
Sources: *CIA World Fact Book and Ministry of Foreign Relations, International Trade and Culture
