Argentina has a highly diversified economy. The primary sector has a very positive reputation worlwide for its high productivity levels. The country’s well-developed industrial base showcases key sectors such as agriculture, automotive, pharmaceuticals and biotechnology industries, as well as the chemical and petrochemical industries, and design, manufacturing and software.
The services sector is gradually developing niche expertise in the more sophisticated segments of the value chain, with a notable growth in software and IT services as well as wide variety of high added-value professional services.
The primary sector—agriculture, animal husbandry, fishing and mining—today represents 11% of the local economy.
The country is a leading producer and exporter of commodities and raw materials, with over 60% of its 280 million hectares dedicated to agricultural production. Worldwide, Argentina is the second-largest producer of honey and mate tea leaf and the third largest of sunflower seeds, lemons and limes. It is also a leading producer of beef, wheat, corn and pears, and it is ranked among the top five exporting countries for honey, pears and soybeans, among others.
The agricultural sector consistently achieves extremely high levels of productivity, reaching higher yields per hectare of soybean and wheat than other major world producers such as Brazil, the United States and Canada.
Argentina also possesses a wealth of mineral resources, mostly concentrated along the Andes mountain range, including significant lead, zinc, tin, silver, potassium, copper and gold deposits. The province of San Juan is home to one of the most important reservoirs of gold and silver on the planet, while to the east of the Cuyo region, with its chalky lime soil, there are major gold, silver, lead and zinc deposits and further to the southeast, copper and molybdenum reserves. The country also has some of the largest lithium deposits in the world, a metal increasingly in demand due to its low environmental impact and utility for cellular phone and car batteries.
The manufacturing industry continues to represent over 21% of the domestic economy.
Agri-business is a major industry in Argentina, food and beverages in particular. Argentina is the world’s top soybean oil producer and second sunflower oil producer: it also places fifth as a wine producer and is the seventh largest wine exporter. There is a correspondingly greater development of sector-specific technological and biotechnological applications, with over 50 bio-technology companies working for national industries.
The production of clean renewable energies, which shows great potential, is undergoing a period of significant expansion. The country is a contender for third place in the world ranking of biodiesel producers, and aims to be the leading biodiesel exporter by 2010. The capacity to generate wind energy is under development by local companies which have achieved an international reputation among their peers for their activities.
Argentina is one of the main automotive producers in the region. The business is well integrated with a specialized auto parts industry of considerable magnitude. Automotive companies located in Brazil and Argentina have developed a reciprocal manufacturing strategy with the objective of supplying the Latin American market as a whole.
Representing nearly 60% of the economy, the services sector has experienced a period of dynamic expansion over the last few years.
Utilities (electricity, gas and water) and transport services are largely in the hands of private companies and offer highly competitive costs compared with other countries in the region, in particular developed countries.
Argentina is a growing producer of differentiated technological goods and services. It is ranked fourth among global exporters of television content and is well placed as a destination for the outsourcing of professional services with added value, including business process outsourcing (BPO), knowledge process outsourcing (KPO), financial services, design and advertising.
The country’s main export products are soybean derivatives: flour, pellets, oil, and beans. Corn, wheat, transport and cargo vehicles, crude oil and petroleum, sunflower seed oil, ship and airplane fuels and lubricants follow in terms of sales.
Argentina has a diversified export structure: according to the World Bank’s World Trade Indicators for 2008, it places just below Canada and the United Kingdom on the trade concentration index, above countries such as New Zealand, India, Mexico, South Africa and Australia.
Brazil is the country’s leading export partner and receives over 20% of Argentine exports, followed by Chile, China and the U.S.
Argentina mostly imports capital and intermediate goods which make up 23% and 32% of its foreign purchases, respectively. This is followed, in order of priority, by parts and accessories for capital goods and consumer goods.
The main products imported include transport vehicles and their accessories, diesel fuel, mobile telephones, airplanes and iron ore.
As with exports, Argentina’s main trading partner for imports is Brazil, the source of 31% of domestic purchases. This figure is well ahead of the U.S. and China, a country which has actually doubled its share of the Argentine import market since 2003.
Major recovery is forecast for 2010 in the export and import of goods which is expected to keep the trade balance high. The excellent 2009-2010 harvest means a sharp increase in the shipments of primary and manufactured agricultural products, bolstered by increased industrial exports, particularly from the automotive sector. On the imports side, growth is linked to the increase in domestic demand for consumer goods, industrial supplies and energy.
Both GDFI and FDI suffered from the impact of the international economic and financial crisis in the fourth quarter of 2008 and during 2009. In Argentina, both variables contracted
In 2009, GDFI in Argentina fell by 10.2% year-on-year, although the investment rate represented 20.6% of GDP in constant terms, a similar level to the historical average experienced from 1950 to 2008 and above levels registered during other recent periods of crisis. At world level, investment contracted by 9.8% in 2009 while in Latin America this figure reached 13.6% (World Bank estimates for 2010).
FDI flows to Argentina in 2009 fell by 50% while global FDI flows in the same period experienced a downturn of 39% according to the United Nations Conference on Trade and Development (UNCTAD).
1980 – 1989
1990 – 2001
Argentina has followed a debt restructuring policy since 2003. National public debt stood at USD 141.665 billion by the third quarter of 2009, representing 49% of GDP. Total foreign debt, both public and private, stood at 41% of GDP, reflecting a marked drop in external obligations on the part of both the public and private sectors.
Argentina’s exchange rate is both stable and competitive, with a floating currency managed bilaterally against the dollar as well as against a basket of currencies from its main trading partners. The managed float approach will continue to be one of the pillars of monetary policy designed to diminish the impact of an excessively volatile exchange rate and thus contribute to strengthening the demand for money.
The stock of international reserves has increased steadily over the last seven years, growing from USD 10 billion in 2002 to USD 48 billion in 2010.
The Central Bank is responsible for regulating and supervising the financial system in order to guarantee it operates correctly.
|Make-up of the Financial System|
|Number of Financial Entities||83|
|Branches of foreign financial entities||9|
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