Argentina » Introduction

Basic Economic Facts

In 2003, import substitution policies and soaring exports, coupled with a lower inflation and expansive economic measures, triggered a surge in the GDP, which was repeated in 2004, creating jobs and encouraging internal consumption. Capital flight decreased, and foreign investment slowly returned. The influx of foreign currency from exports created such a huge trade surplus that the Central Bank was forced to buy dollars from the market, which it continues to do at the time, to be accumulated as reserves.

The situation in 2005 is much improved, but there are still large numbers of unemployed people that beg for money or food, particularly in the outskirts of Buenos Aires. Some of them are homeless, and there is at least one small non-profit humanitarian organization which distributes free food to some of them most days of the week. However, Argentina is still the most developed country in Latin America. It boasts the highest GDP per capita, the highest levels of education measured by university attendance, and a reasonable infrastructure that in many aspects is equal in quality to that found in fully industrialized nations. Telecommunications are particularly strong with an important penetration of mobile telephony, Internet and wideband services. In 2002 over 57% of the population was below the poverty line, but at the end of 2005 it was 33.8%. In 2002 unemployment was over 25%, but by December 2005 it was 10.2%. GDP per capita has surpassed the previous pre-recession peak of 1998. The economy grew 8.9% in 2003, 9.0% in 2004, and 9.2% in 2005; the floor was set at 7% for 2006. As of 2006 foreign debt stands at 68% of GDP and is slowly decreasing.