Based upon recent statistical figures, Argentina is an economically modest country. The inflation rate is 28.8%, which puts it in 218th place in the world ranking. For example, its GDP of 2013 was $771 billion, ranked 23rd in the world. Its growth rate, while much lower than the 2011 figure of 8.9%, has increased from 2012’s 1.9% to 3.5% in 2013. Argentina’s GDP per capita stood at $18,600 in 2013 as well, with household consumption taking up the most at 55.5% and with investment in fixed capital in second place with 22%. Exports of goods and services followed closely behind at 20.3%. Reflecting this, the purchase of services is responsible for 61% of the GDP composition, with industry at 29% and agriculture at 9.3%.
The overall revenue of Argentina is $129.6 billion, in which taxes and other revenues make up 26.8% of the GDP. Expenditures average about $145.3 billion, while the budget deficit is -3.2% of the GDP.
In regards to Argentina’s private sector, it contributed to 15.8% of the total GDP in 2013. While this isn’t an extraordinarily large number, there has been a definite upward trend beginning with 11.6 in 2010, then 13.3 in 2011, and 14.6 in 2012.
As mentioned in regards to the GDP composition, exports of good and services make up 20.3% of it. The total country trade of exports is $79.9 million, with major exported goods being soybeans, corn, cars and delivery trucks, wheat, petroleum, gold, and wine. However, Argentinian currency of the peso is not freely convertible. As at March 8th, 2015, the exchange rate of the peso to US dollars was about $1 to 8.76 pesos. There is a cause for the conversion rate, as Argentinian President Christina Fernandez restricted access of foreign currency, thus tightening imports and export constraints. 2012 saw tightened currency controls, as more orthodox policies in 2014 devalued the peso by 20%, also tightening monetary and fiscal policies. However, the value of the peso is decreasing as import restrictions ease. Argentina also has tariffs on its exports, with a certain tariff assigned to certain products. The 2013 average tariff was 22%. Argentina is now currently engaged with the International Monetary Fund to improve economic data reporting.
As Argentina historically is very cooperative with foreign investment, as of 2012, it hosted 500 companies from the US, which employee over 155,000 Argentines. The government is encouraging direct foreign investment with hopes that the GDP will increase, therefore they do not require prior approval for foreign business. They do, in fact, have the Argentine Foreign Investment Law, which gives foreign investors the same rights as local investors.
Politics are tightly entwined with economics in most nations, and Argentina is no different. The country is identified as a republic, with three major branches like the US: executive, legislative, and judicial. The executive branch consists of the President and cabinet, the legislative section has 72 Senate seats and 257 Chamber of Deputies seats, and the judicial portion consists of the Highest courts (President, Vice President, and five judges), as well as Subordinate Courts. However, like all governments, Argentina has its share of issues, including bribery and fraud as its largest source of corruption, but there are legal and institutional frameworks for dealing with corruptions.
Argentina has its fair share of domestic monopolies, such as Telecom, TELINTAR, and Telefonica, and quotas even with all of the foreign investment. To elaborate upon domestic businesses, there are a multitude of privatized state-owned industries. This includes natural gas (privatized in 1992), the telephone network (1990), and radio networks (between 1980 and 1993). As implied, the telecommunications industry, as well as the banking industry, has an impact in Argentina’s FDI. They reached a record high in 2011, averaging $592.45 USD million from 2003 – 2014.
Social welfare is another important aspect of the Argentinian economy. Most programs in the nation offer at least a basic form of social protection, but sometimes it goes to a higher level, as in 2008, financing was improved within this category to allow for better protection. Primary school enrolment is universal, and 86% of children are covered by family allowances. 90% of adults over 65 receive retirement benefits, but the main concern within this aspect of the economy is providing protective coverage that can prevent the loss of these welfare programs.