Argentina has benefited economically because of having literate population, the agricultural sector that is export-oriented, the diversified industrial base, as well as a wide range of natural resources. The history of this country has experienced uneven pattern of economic growth marked with severe recessions. For instance, the late 20th century was marked with an increase in the poverty rates and income mal-distribution. However, the country was marked as the richest in the southern hemisphere region and one of the richest in the world. Although the economy has faced quite a number of challenges, the country has maintained a relatively high quality of life, as well as GDP per capita (The Guardian 1). According to the FTSE Global Equity Index Argentina is considered as one of the G-20 major economies and as an emerging market.
In the year 2001, the country faced challenges because of massive loans defaults. However, the country has achieved an incredible growth rate for eight consecutive years between 2002 and 2010 (PWC 1). For instance, in the year 2010, it fared well in the global financial crisis where it recorded a growth rate of 9.2 %. The reduced industrial production realized in this year by 4.6 % hindered the economic growth rate. Experts have predicted a low growth rate ranging between 2 to 4%; though, some pessimists forecast a recession. The government critics argue that the government has been manipulating figures to its advantage, thereby leading to several analysts using incorrect values to evaluate its economy. It is believed that the inflation rate is the only area where the government tends to manipulate data. This has prompted the IMF issue a deadline to this government to improve the national statistics failure which sanctions would be attracted to. The government has made an effort to improve the economy through supporting the private sector (The Guardian 1).
The government deserves credit for effectively overcoming a huge slowdown experienced in the year 2009 (PWC 1). At a constant price, GDP went up by more than 9% year-on-year driven by the private consumption. The level of activity and growth in domestic demand accelerated pressure on inflation, which went up when compared to the previous years. Unfortunately, the accuracy of the figures has not been confirmed because the methodology that was applied by the National Institute of Statistics and Census (INDEC) was questionable. Significant discrepancies were realized between the estimated inflation rate by the private consultants and that presented by the government organ.
At the end of the same year, with a surplus of up to USD 12 billion, the trade balance gave a positive figure. Exports progressively went up though at a lower rate than the imports. It was explained by a small appreciation on the argentine peso rate and economic growth. International Reserves grew to more than US$ 52 billion by the end of the year 2010 (Businessweek.com 1). The financial department went on indicating both a financial and primary financial surplus. In the year 2010, the government recorded a growth rate in revenue collection of at least 33.1% in nominal terms, a figure that was notably higher than an average of 26.7% realized in the past seven years. The Social Security resources influenced this increase by 31.1% as well as value added tax by 33.2%. This means that the primary surplus noted in 2010 represented a higher 1.6%t GDP compared to 1.4% realized in 2009 (Economy.com 1).
Nevertheless, the presented figures contained as income in the amount transfers of Special Drawing Rights influenced by the IMF to the profits of BCRA, all member countries, and ANSES8. When put into comparison and without considering the effects of the above items, the fiscal results indicated a deficit of -0.3% of GDP by the end of 2010, as well as a -0.4% of GDP by the end of 2009 (Export.gov 1). The financial results, which entailed the primary results without the interest payment on the debts, indicated a surplus of 0.2% of GDP during the analysis of 2010 and a 1.7% of GDP, upon similar adjustments, rather than -0.6% and -2.4% of GDP in 2009 and 2010 respectively (Export.gov 1).
After the economic challenges experienced in 2009, the government initiated major economic improvement activities. The trade surplus became the key economic pillar where the government supported various expansion schemes. The fiscal surplus was the other pillar that supported expansion over the last decade, but weakened from 2008 particularly because of escalating expenses. Although the Monthly Economic Activity Indicator (EMAE) presented signs of economic deceleration at the beginning of the year 2011, it remained strong and recorded an annual growth rate of 8.2% in the month of June 2011 (Economy.com 1).
This country has achieved significant growth in the agricultural sector, becoming one of the major producers in the world. It largely produces and exports citrus fruits, beef, maize, sorghum, honey, grapes, yerba mate, squash, soybeans, sunflower seeds, and wheat. In 2010, the agricultural sector accounted for about 9% of the GDP, which was approximately a fifth of the total exports. The mining sector has improved the economy from as low as 2% in 1980 to about 4% today. A number of minerals and metals are available in this country, including copper, borate, uranium, tungsten, gold, zinc, lead, magnesium, and sulphur. The income generated from this sector has increased from US$ 200 million in 1996 to more than US$ 3 billion in 2010(Indexmundi.com 1).
The manufacturing sector is one of the leading contributors of the country’s economy as it is responsible for about 19% of the GDP. The manufacturing sector has been effectively integrated with the agricultural sector since most of its exports are agricultural in nature. The major production values include motor vehicle, auto spares, food processing and beverage, biodiesel, pharmaceuticals, refinery products, and electronics.
The service sector is the biggest contributor of the economic growth accounting for more than 60% of the GDP. The economy has benefited from diversified services, including the well-developed insurance, social, corporate, transport, real estate, tourism, communication, and financial services. The banking sector has not been left behind in the economic growth. For instance, in December 2012, deposits went beyond US$120 billion (Businessweek.com 1). This sector developed around the public banks but was later dominated by the private sector, which now accounts for more than eighty active institutions, holding almost 60% of loans and deposits.
In 2012, estimates provided by the World Economic forum indicated an income of about US$47 billion from tourism, a sector that also provided more than 1.8 million jobs (Indexmundi.com 1). Citizens who are active travellers in the country accounted for above 80% of the revenue collected from the sector. Electricity generation is a sector that has boosted this economy. It has been considered as the third biggest power market, particularly in the Latin America. The country produces natural gas, oil-fired and hydroelectricity in large volumes. The country enjoys relatively advanced transport infrastructure with over 230,000km of roads where 2,643 kilometres are express roads and 72,000km paved ones (Economy.com 1).