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 negative 0.5%, 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 still further 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. At the start of 2002, newly elected president Eduardo DUHALDE met with IMF officials to secure an additional $20 billion loan, but immediate action seemed unlikely. The peso's peg to the dollar was abandoned in January 2002, and the peso was floated from the dollar in February; inflation picked up rapidly.

GDP purchasing power parity - $453 billion (2001 est.)

GDP - real growth rate -4.6% (2001 est.)

GDP - per capita purchasing power parity - $12,000 (2001 est.)

GDP - composition by sector
agriculture: 6%
industry: 28%
services: 66% (2001 est.)

Population below poverty line 37% (2001 est.)

Household income or consumption by percentage share
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices) 4% (2001 est.)

Labor force 15 million (1999)

Labor force - by occupation agriculture NA%, industry NA%, services NA%

Unemployment rate 25% (yearend 2001)

Budget
revenues: $44 billion
expenditures: $48 billion, including capital expenditures of $NA (2000 est.)

Industries food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel

Industrial production growth rate 1% (2000 est.)

Electricity - production 82.802 billion kWh (2000)

Electricity - production by source
fossil fuel: 51.81%
hydro: 40.67%
other: 0.29% (2000)
nuclear: 7.23%

Electricity - consumption 80.806 billion kWh (2000)

Electricity - exports 3.7 billion kWh (2000)

Electricity - imports 7.5 billion kWh (2000)

Agriculture - products sunflower seeds, lemons, soybeans, grapes, corn, tobacco, peanuts, tea, wheat; livestock

Exports $26.5 billion (f.o.b., 2000 est.)

Exports - commodities edible oils, fuels and energy, cereals, feed, motor vehicles

Exports - partners Brazil 26.5%, US 11.8%, Chile 10.6%, Spain 3.5% (2000)

Imports $23.8 billion (f.o.b., 2000 est.)

Imports - commodities machinery and equipment, motor vehicles, chemicals, metal manufactures, plastics

Imports - partners Brazil 25.1%, US 18.7%, Germany 5%, China 4.6% (2000)

Debt - external $155 billion (2001 est.)

Economic aid - recipient $10 billion (2001 est.)

Currency Argentine peso (ARS)

Currency code ARS

Exchange rates Argentine pesos per US dollar - 1.33325 (January 2002), 1.000 (1997-2001); note - fixed rate pegged to the US dollar was abandoned in January 2002; peso now floats

Fiscal year calendar year

NOTE: The information regarding Argentina on this page is re-published from the 2002 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Argentina Economy 2002 information contained here. All suggestions for corrections of any errors about Argentina Economy 2002 should be addressed to the CIA.