Argentina Economic Forecast

Argentina Economic Outlook

May 15, 2018

After days of financial volatility reminiscent of previous economic crises, the government announced on 8 May it was seeking IMF assistance to shore up the economy. Financial turbulence and growing concerns over Argentina’s capacity to service its large foreign-debt commitments caused the peso to lose over 11% of its value in a single day on 3 May, prompting the Central Bank to forcefully intervene. On 4 May, the government announced steep cuts in public spending and set a more ambitious fiscal deficit reduction target for 2018 to appease markets and restore confidence. The policies implemented will inevitably weigh on the recovery of the real sector, which continued to grow at a strong pace in Q1. It also represents a huge setback for President Mauricio Macri’s economic policy of gradualism, as well as his re-election bid in next year’s election.

Argentina Economic Growth

Recent developments have generated uncertainty on the country’s economic outlook, and many of our panelists are still assessing the impact they will have. Nevertheless, panelists participating in the LatinFocus Consensus Forecast expect economic prospects to deteriorate and foresee the economy expanding 2.3% in 2018, which is down 0.3 percentage points from last month’s forecast. For 2019, growth is expected to reach 3.0%.

Argentina Economy Data

Population (million)42.242.743.143.644.1
GDP per capita (USD)14,51113,13314,85412,507-  
GDP (USD bn)614560641545-  
Economic Growth (GDP, annual variation in %)2.4-2.52.6-2.2-  
Domestic Demand (annual variation in %)4.0-3.94.0-0.7-  
Consumption (annual variation in %)3.6-4.43.5-1.4-  
Investment (annual variation in %)2.3-6.83.8-5.1-  
Industrial Production (annual variation in %)0.0-1.8-  -4.6-  
Retail Sales (annual variation in %)26.737.327.326.2-  
Unemployment Rate7.  
Fiscal Balance (% of GDP)-1.9-2.4-3.9-5.9-  
Public Debt (% of GDP)33.039.653.554.2-  
Money (annual variation in %)25.728.928.230.4-  
Inflation Rate (CPI, annual variation in %, eop)26.638.026.941.0-  
Inflation Rate (CPI, annual variation in %)18.438.026.741.2-  
Inflation (PPI, annual variation in %)14.828.3-  -  -  
Benchmark Interest Rate (%)17.7519.6127.5618.17-  
Stock Market (annual variation in %)88.959.136.144.9-  
Exchange Rate (vs USD)6.528.4612.9415.86-  
Exchange Rate (vs USD, aop)5.488.129.2714.77-  
Current Account (% of GDP)-2.1-1.6-2.6-2.8-  
Current Account Balance (USD bn)-13.0-8.9-16.8-15.0-  
Trade Balance (USD billion)1.53.2-3.02.1-  
Exports (USD billion)76.068.456.857.7-  
Imports (USD billion)74.465.259.855.6-  
Exports (annual variation in %)-5.0-9.9-17.01.7-  
Imports (annual variation in %)9.5-12.4-8.4-6.9-  
International Reserves (USD)30.631.425.638.8-  
External Debt (% of GDP)25.929.026.635.3-  

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Argentina Facts

Bond Yield6.690.15 %Dec 17
Exchange Rate24.380.45 %May 21
Stock Market31,6322.26 %May 21

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