Argentina : economic indicators and trade with EU

Abstract

In 2017, Argentina’s economy continued its gradual recovery from major macroeconomic imbalances with a GDP per capita growth rate of 2.9% thanks to austerity measures and a comprehensive reform agenda. However, inflation at 25.7% and unemployment at 8.5% remained high. Whereas economic fundamentals were slowly improving and the country’s political context remained stable after president Mauricio Macri made political gains at the mid-term legislative elections in October 2017, a crisis of confidence hit the economy in spring 2018. The crisis exposed vulnerabilities resulting from Argentina’s fiscal and current account deficit and large foreign-denominated debt. As the peso continued its downward trend in autumn 2018, although Argentina secured an IMF US$50 billion credit line and committed to new austerity measures, the economic context is likely to harden ahead of the 2019 presidential elections. With a share of 16.2% of Argentina’s overall trade, the EU is the country’s second largest trading partner after Brazil that accounts for 21.9%. In 2017, EU exports to Argentina increased to almost €10 billion, while EU imports slightly decreased to more than €8 billion. Total imports of primary products from Argentina declined and those of manufactures, notably chemicals, grew. EU exports of both primary products and manufactures, particularly machinery and appliances as well as transport equipment, increased.