Argentina: Economic and Political Overview

Economic Overview

Argentina has a long history of political and economic instability - with significant growth fluctuations every year. After two years of recession (–1.6% in 2023, –3.5% in 2024), GDP is projected to grow by 5% in 2025 and 2026 (IMF). Quarterly growth rebounded to 3.4% in Q3/2024, according to a monthly activity indicator. Agriculture, livestock, and mining led the expansion, with manufacturing, construction, and trade also showing strong recoveries. Real credit is increasing. Over the forecast horizon, recovery will be driven by real wage gains, declining inflation, and a stronger labour market, boosting private consumption. Investments will rise with improved confidence and a new preferential regime for large projects. Imports are expected to outpace export growth as domestic demand rebounds. However, delays in planned reforms pose a key downside risk.

The government led by Milei, who took office in December 2023, faces the imperative task of consolidating public finances to stabilize the economy. The authorities are pursuing an economic stabilization program focused on aggressive fiscal adjustment to reverse past BCRA monetary financing, a crawling-peg exchange rate, negative real interest rates to reduce peso liabilities, and maintaining FX controls to support these measures. In 2024, Argentina achieved its first budget surplus in over a decade, totalling ARS 1.76 trillion (0.3% of GDP). The primary fiscal surplus, excluding debt payments, reached ARS 10.41 trillion (1.8% of GDP). In mid-2024, Congress approved a fiscal package lowering the income tax floor and adjusting the personal goods tax, expected to raise revenues by 0.5% of GDP annually. Meanwhile, Milei’s refusal to submit the 2025 budget to Congress has sparked backlash from provincial governors, as he seeks to retain control over public spending amid demands for increased funding for public works and local pensions. The 2025 budget aims for a balanced headline budget and requires automatic spending cuts to cover revenue shortfalls. In line with the deficit reduction, the national debt-to-GDP ratio decreased from 155.4% in 2023 to 91.5% last year and is expected to follow a downward trend, landing at around 68% by 2026 (IMF). Argentina is a country plagued with hyperinflation; however, 2024 showed positive signs, as inflation went down to 117.8, 93.6 points less than in 2023, when prices rose by a record 211.4% (data INDEC).

Despite challenges, the labour market remains resilient, with unemployment standing at 8.2% in 2024, although it increased compared to the previous year (6.1% - IMF). Nonetheless, informality has surged, nearing 40% of the labour force (OECD). The IMF expects the unemployment rate to remain relatively stable over the forecast horizon. The Argentine government has faced difficulties in fighting high levels of poverty, which affects more than 40% of the population, and the social situation of the country is characterised by constant underlying tensions between the Government and trade unions over the reforms announced. The country is also split between central and decentralised authorities over the distribution of federal revenues.

Main Sectors of Industry

Despite recent economic struggles, Argentina continues to play an important role in the global economy, especially with regard to its agricultural production. The sector is mainly based on livestock farming (cattle production is a key economic sector and a major source of export earnings), cereal cultivation (wheat, corn and transgenic soy), citrus fruits, tobacco, tea and grapes (mostly for the production of wine). Argentina is the world’s largest exporter of soy-derived products and the world’s third-largest producer of such products. The agricultural sector represents 5.9% of the country’s GDP and employs 1% of the population, according to the World Bank. Additionally, given that the country is rich in energy resources, Argentina also has great potential in terms of raw materials: it is the fourth-largest natural gas producer in Latin America, and it has the world's third-largest shale gas reserve and the fourth-largest lithium reserve. Agricultural exports are a key source of revenue for Argentina: the latest projections for 2024 pointed to a value of USD 30.5 billion in exports for the year.

According to the latest data from the World Bank, the industrial sector represents 25.1% of GDP and employs 23% of the population. Prominent sectors include food processing, automotive manufacturing, petrochemicals, and electronics. Historically, Argentina has been known for its agricultural output, and this remains a significant part of its industrial landscape, with food processing playing a vital role in the economy. Automotive manufacturing has also been a key sector, with several multinational companies operating in the country. In recent years, there has been a growing focus on renewable energy, particularly wind and solar power, as Argentina seeks to diversify its energy sources and reduce reliance on traditional fuels. According to data by INDEC, Argentina's industrial activity fell by 9.4% in 2024, although it saw an annual recovery in December (+8.4%) after 18 consecutive months of decline.

The service sector is the largest contributor to GDP, accounting for 53.1%, and it employs 76% of the active workforce. Key activities include finance, tourism, telecommunications, healthcare, education, and retail. Finance, particularly banking and insurance, plays an important role in Argentina's economy (around 5.1% of GDP). Tourism is pivotal and is estimated to account for almost 9% of the country’s GDP (data WTTC). Healthcare and education sectors continue to expand, and retail and consumer services are also important. The overall contribution of the commerce sector to the GDP stands at roughly 15%, according to official governmental figures.

Source: World Bank, Latest data available.

Indicator of Economic Freedom

Score:

52,7/100

World Rank:

148

Regional Rank:

26

Business environment ranking

Score:

4.98/10

World Rank:

73/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

Sources of General Economic Information

Ministries

Official list of ministries
Website of the Argentine Republic
Ministry of Economy
Ministry of Foreign Affairs, International Trade and Worship

Statistical Office

National Institute of Statistics and Census (INDEC)

Central Bank

Central Bank of the Argentine Republic

Stock Exchange

Buenos Aires Stock Exchange (Bolsa de Comercio de Buenos Aires)

Other Useful Resources

Association of Importers an Exporters of the Argentine Republic (AIERA)
Argentinian Agency for Investment and International Commerce

Main Online Newspapers

La Nación
Clarín
El Cronista
La Prensa
Apertura
Página12
El Economista
Infobae Económico
Prensa Económica

Economic Portals

Ministry of Economy and Public Finances

Political Outline

Current Political Leaders

President: Javier Milei (since 10 December 2023); the president is both chief of state and head of government.

Next Election Dates

President: October 2027
Legislative (Senate and Chamber of Deputies): October 2025

Current Political Context

Argentina conducted general elections on October 22, 2023, to elect the president, vice president, members of the National Congress, and governors of most provinces. The incumbent president Alberto Fernández and former president Cristina Fernández de Kirchner, who was also the incumbent vice president and eligible for re-election to a consecutive term, opted not to seek another term in office. With no presidential candidate securing a majority in the initial round, a runoff occurred on November 19. In the runoff, Javier Milei emerged victorious over Sergio Massa to assume the presidency of Argentina.
New President Javier Milei described himself as an 'anarcho-capitalist' and is pursuing libertarian policies. In 2024, Argentina's political landscape was characterized by decisive legislative and executive actions. To lower the fiscal deficit and draw in foreign investment, the administration unveiled a comprehensive tax overhaul in February. Opposition groups, led by the Union for the Homeland and elements of the Radical Civic Union, argued that the measures could exacerbate economic disparity, sparking contentious discussions in Congress. Furthermore, to improve hiring and firing flexibility, the Chamber of Deputies adopted a labour market reform in March. However, trade unions staged demonstrations all around the country to call for more robust protections for workers' rights.There was uncertainty for both domestic and foreign investors throughout the year as a result of court decisions that contested a number of executive decrees pertaining to the privatization of state-owned businesses. Though its power was constrained by internal conflicts, a new legislative alliance called Hacemos Coalición Federal appeared in July to heal divisions among moderate opposition lawmakers.In an effort to increase regional autonomy and decentralize decision-making, the Senate passed amendments in September that transferred certain administrative authority to province governments. Political polarization increased as a result of these actions and continuing disagreements over economic policy, setting the stage for a contentious election cycle in 2025.

Main Political Parties

The main parties/coalitions in Argentina include:

- Freedom Advances (La Libertad Avanza - LLA): far-right political coalition, holding conservative and ultraconservative positions on social and cultural matters, while adopting right-wing libertarian or ultra-liberal stances on economic issues. It is led by Javier Milei, who was elected Presiden in the 2023 Argentine general election
- Union for the Homeland (Unión por la Patria, UP): political and electoral coalition of Peronist political parties, it is the main opposition coalition
- Republican Proposal (Propuesta Republicana - PRO): right-wing, with center-right and far-right factions
- Radical Civic Union (Unión Cívica Radical - UCR): centrist, liberal
- Hacemos Coalición Federal (HCF): political/parliamentary alliance that unified the blocs Hacemos por Nuestro País, Coalición Cívica ARI, and Cambio Federal in the Chamber of Deputies
- Federal Peronism (Peronismo Federal): moderate, centrist, or right-wing Peronism, primarily recognized for its opposition to Kirchnerism, the left-wing faction of Peronism.

Type of State

Argentina is a federal representative democratic republic.

Executive Power

Executive power is held by the President of the Argentine nation and is his/her responsibility to respond to national interests. The President is the Head of the Government and the Chief of State, the individual responsible for the general administration of the country and the Commander-in-Chief of the Armed Forces. The President is elected by universal suffrage for a four-year term and can be re-elected for a subsequent consecutive term of office. The Vice President is elected alongside the President. The President appoints individuals to the Council of Ministers.
Argentina has 23 provinces and one autonomous federal district - each retains some powers that do not belong to the federal government and elects its own legislators and provincial governors.

Legislative Power

The legislative power is held by the bicameral National Congress (Congreso Nacional). The Chamber of Deputies (the lower house) is comprised of 257 members, which are elected to four-year terms by direct universal suffrage, with half of the membership renewed every two years. The Senate (upper house) is comprised of 72 members, which are elected to six-year terms by direct universal suffrage - with one third of the members elected every two years.

Indicator of Freedom of the Press

World Rank:

69/180

Indicator of Political Freedom

Ranking:

Free

Political Freedom:

2/7

Civil Liberties:

2/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House