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Economy of Argentina

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Economy of Argentina
CurrencyArgentine Peso (ARS)
Calendar year
Trade organisations
WTO, Mercosur, Unasur
Statistics
GDP$370.26 billion (nominal)[1]
$642.4 billion (PPP) (22nd, 2010)[2]
GDP growth
9.2% (2010)
GDP per capita
$9,583 (nominal, 2011)[1]
$15,854 (PPP) (52nd, 2010)
GDP by sector
Agriculture, forestry and fishing, 9.2%; mining, 3.3%; manufacturing, 18.8%; construction, 5.2%; commerce and tourism, 13.5%; transport, communications and utilities, 8.5%; finance, real estate and business services, 15.0%; government, 6.3%; education, health care and other, 20.2%. (2010)[1]
10.9% (2010) Private estimate: 21.7% (3/2011)[3]
Population below poverty line
12.0% (2010)[4]
0.379 (2011, 1st third)[5]
Labour force
17 million (2007) categories: private-sector employees, 49%; employers and the self-employed, 27%; public-sector employees, 21%; unpaid family workers, 3% (2001).[6]
Labour force by occupation
Agricultural, 7.3%; manufacturing, 13.1%; construction, 7.6%; commerce and tourism, 21.4%; transport, communications and utilities, 7.8%; financial, real estate and business services, 9.4%; public administration and defense, 6.3%; social services and other, 27.1%. (2006)[6]
Unemployment7.3% (12/2010)[7]
Main industries
Food processing, motor vehicles and auto parts, appliances and electronics, chemicals and petrochemicals, pharmaceuticals, steel, aluminum, machinery, textiles, beverages, printing, furniture.
External
ExportsUS$68.5 billion (2010)
Export goods
Soybeans and byproducts, 25.3%; motor vehicles and parts, 11.8%; cereals (mainly maize and wheat), 6.9%; chemicals, 6.7%; natural gas and petroleum, 5.3%; refined fuel, 4.1%; aluminum and steel, 3.9%; fruit and vegetable products, 3.9%; electric machinery, 3.2%; gold, 3.0%; other industrial products, 6.5%; all other (mainly processed agricultural goods), 19.4%. (2010)[8]
Main export partners
Brazil, 18.8%; China, 9.3%; Chile, 7.1%; United States, 6.4%. (2009)
ImportsUS$56.4 billion (2010)
Import goods
Capital goods and parts, 36.0%; intermediate goods, 31.3%; automobiles and parts, 8.7%; refined fuel and lubricants, 7.9%; consumer durables (except auto), 4.9%; freight vehicles, 4.9%; all other (mostly consumer non-durables), 6.3%. (2010)[8]
Main import partners
Brazil, 31.1%; United States, 13.7%; China, 10.3%; Germany, 4.7%. (2009)
FDI stock
$80.2 billion (12/2009)[9]
$118.0 billion (12/2009)[9]
Public finances
41.2% of GDP, US$163.7 billion (Treasury securities, 68%; direct loans, 18%); of which external, US$61.9 bil. (12/2010)[9]
RevenuesUS$112.9 billion (2010) (social security, 29.4%; value-added taxes, 26.3%; taxes on income and capital gains, 18.2%; customs duties, 13.4%; taxes on assets, 7.2%; excise taxes and other, 5.5%)[10]
ExpensesUS$112.1 billion (2010) (social security, 31.4%; subsidies and infrastructure, 20.2%; health, 13.0%; debt service, 10.2%; education, culture and research, 6.0%; social assistance, 5.9%; defense and security, 5.1%; other, 8.2%)[11]
B (Domestic)
B (Foreign)
B (T&C Assessment)
(Standard & Poor's)[12]
$52.4 billion (1/2011)[9]
All values, unless otherwise stated, are in US dollars.

The economy of Argentina is Latin America's third-largest,[13] with a high quality of life and GDP per capita.[14] An upper middle-income economy,[15] Argentina has a firm foundation for future growth for its market size, the levels of foreign direct investment, and percentage of high-tech exports as share of total manufactured goods.[16]

The country benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector and a diversified industrial base. Historically, however, Argentina's economic performance has been very uneven, in which high economic growth alternated with severe recessions, particularly during the late twentieth century, and income maldistribution and poverty increased. Early in the twentieth century it was one of the richest countries in the world and the richest in the Southern hemisphere,[17] though it is now an upper-middle income country.

Argentina is considered an emerging market by the FTSE Global Equity Index, and is one of the G-20 major economies.

History

Main article: Economic history of Argentina

Prior to the 1880s, Argentina was a relatively isolated backwater, dependent on the salted meat, wool, leather, and hide industries for both the greater part of its foreign exchange and the generation of domestic income and profits. The Argentine economy began to experience swift growth after 1875 through the export of livestock and grain commodities, however,[18] as well as through British and French investment, marking the beginning of a significant era of economic expansion.[19]

During its most vigorous period, from 1880 to 1905, this expansion resulted in a 7.5-fold growth in GDP, averaging about 8% annually.[20] One important measure of development, GDP per capita, rose from 35% of the United States average to about 80% during that period.[20] Growth then slowed considerably, though throughout the period from 1890 to 1939, the country's per capita income was similar to that of France, Germany and Canada[21] (although income in Argentina remained considerably less evenly distributed).[18]

The great depression caused Argentine GDP to fall by a fourth between 1929 and 1932.[22] Having recovered its lost ground by the late 1930s partly through import substitution, the economy continued to grow modestly during World War II (in sharp contrast to what had happened in the previous World War). Indeed, the reduced availability of imports and the war's beneficial effects on both the quantity and price of Argentine exports combined to create a US$ 1.7 billion cumulative surplus during those years.[23] Benefiting from innovative self-financing and government loans alike, value added in manufacturing surpassed that of agriculture for the first time in 1943, and employed over 1 million by 1947.[24]

The administration of Juan Perón nationalized strategic industries and services from 1945 to 1955. Inflation first [citation needed] became a chronic problem during this period (it averaged 26% annually from 1944 to 1974) and Argentina did not become "industrialized" or fully "developed"; but, from 1932 to 1974, Argentina's economy grew almost fivefold (or 3.8% in annual terms),[25] while its population only doubled. Though unremarkable, this expansion was well-distributed and so resulted in very positive changes in Argentine society, most notably the development of the largest proportional middle class (40% of the population by the 1960s) in Latin America[25] as well as the region's best-paid, most unionized working class.[26]

The partial enactment of Developmentalism after 1958 was followed by a promising fifteen years. The economy, however, declined during the military dictatorship from 1976 to 1983, and for some time afterwards.[27] The dictatorship's chief economist, José Alfredo Martínez de Hoz, advanced a disorganized, corrupt, monetarist policy of financial liberalization that increased the debt burden and interrupted industrial development and upward social mobility;[28] over 400,000 companies of all sizes went bankrupt by 1982,[22] and economic decisions made from 1983 through 2001 failed to reverse the situation.

Record foreign debt interest payments, tax evasion and capital flight resulted in a balance of payments crisis that plagued Argentina with severe stagflation from 1975 to 1990. Attempting to remedy this, economist Domingo Cavallo pegged the peso to the U.S. dollar in 1991 and limited the growth in the money supply. His team then embarked on a path of trade liberalization, deregulation and privatization. Inflation dropped and GDP grew by one third in four years;[1] but external economic shocks and failures of the system diluted benefits, causing the economy to crumble slowly from 1995 until the collapse in 2001. That year and the next, the economy suffered its sharpest decline since 1930; by 2002, Argentina had defaulted on its debt, its GDP had shrunk, unemployment reached 25% and the peso had depreciated 70% after being devalued and floated.[1] Argentine debt restructuring offers in 2005 and 2010 resumed payments on the majority of its almost $100 billion in defaulted bonds from 2001. The economic minister Amado Boudou said that with the offer, the Argentine government hoped "to end the shame of 2001 once and for all."[29]

Expansionary policies and commodity exports triggered a rebound in GDP from 2003 onwards. This trend has been largely maintained, creating millions of jobs and encouraging internal consumption. The socio-economic situation has been steadily improving and the economy grew around 9% annually for five consecutive years between 2003 and 2007, and 7% in 2008. The global recession of 2007–10 affected the economy in 2009, with growth slowing to 0.8%.[1] High economic growth resumed in 2010, and GDP expanded by over 8.5%.[30]

Sectors

Agriculture

Main article: Agriculture in Argentina

Argentina is one of the world's major agricultural producers, ranking among the top producers and, in most of the following, exporters of beef, citrus fruit, grapes, honey, maize, sorghum, soybeans, squash, sunflower seeds, wheat, and yerba mate.[31] Agriculture accounted for 9% of GDP in 2010, and around one fifth of all exports (not including processed food and feed, which are another third). Commercial harvests reached 103 million tons in 2010, of which over 54 million were oilseeds (mainly soy and sunflower), and over 46 million were cereals (mainly maize, wheat, and sorghum).[32] Soy and its byproducts, mainly animal feed and vegetable oils, are major export commodities with one fourth of the total; cereals added another 7%. Cattle-raising is also a major industry, though mostly for domestic consumption; beef, leather and dairy were 5% of total exports.[8] Sheep-raising and wool are important in Patagonia, though these activities have declined by half since 1990.[7]

Fruits and vegetables made up 4% of exports: apples and pears in the Río Negro valley; rice, oranges and other citrus in the northwest and Mesopotamia; grapes and strawberries in Cuyo (the west), and berries in the far south. Cotton and tobacco are major crops in the Gran Chaco, sugarcane and chile peppers in the northwest, and olives and garlic in the west. Yerba mate tea (Misiones), tomatoes (Salta) and peaches (Mendoza) are grown for domestic consumption. Argentina is the world's fifth-largest wine producer, and fine wine production has taken major leaps in quality. A growing export, total viticulture potential is far from having been met. Mendoza is the largest wine region, followed by San Juan.[33]

Government policy towards the lucrative agrarian sector is a subject of, at times, contentious debate in Argentina. A grain embargo by farmers protesting an increase in export taxes for their products began in March 2008,[34] and, following a series of failed negotiations, strikes and lockouts largely subsided only with the 16 July defeat of the export tax-hike in the Senate.[35]

Argentine fisheries bring in about a million tons of catch annually,[7] and are centered around Argentine hake which makes up 50% of the catch, pollack, squid and centolla crab. Forestry has long history in every Argentine region, apart from the pampas, accounting for almost 14 million m³ of roundwood harvests.[36] Eucalyptus, pine, and elm (for cellulose) are all widely harvested, mainly for domestic furniture, as well as paper products (1.5 million tons). Fisheries and logging each account for 2% of exports.[7]

Natural resources

See also: Mining in Argentina

Mining is a growing industry, increasing from 2% of GDP in 1980 to nearly 4% today. The northwest and San Juan Province are the main regions of activity. Coal is mined in Santa Cruz Province. Metals mined include copper, zinc, magnesium, sulfur, tungsten, uranium silver, and particularly, gold, whose production was boosted by recent investments from Barrick Gold in San Juan. Metal ore exports soared from US$ 200 million in 1996 to US$ 1.2 billion in 2004,[37] and to over US$ 3 billion in 2010.[8]

Around 35 million m³ each of petroleum and petroleum fuels are produced, as well as 50 billion m³ of natural gas, making the nation self-sufficient in these staples, and generating around 10% of exports. The most important oil fields lie in Patagonia and Cuyo. A network of pipelines (next to Mexico's, the second-longest in Latin America) send raw product to Bahía Blanca, center of the petrochemical industry, and to the La Plata-Buenos Aires-Rosario industrial belt.

Industry

Manufacturing is the largest single sector in the nation's economy (19% of GDP), and is well-integrated into Argentine agriculture, with half the nation's industrial exports being agricultural in nature.[7] Leading sectors by production value are: food processing, chemicals and pharmaceuticals, motor vehicles, farming equipment and auto parts, iron, steel and aluminum, petroleum, as well as industrial machinery and home appliances. These latter include over three million big ticket items, as well as an array of electronics, kitchen appliances and cellular phones, among others. Beverages are another significant sector, and Argentina has long been among the top five wine producing countries in the world, though in 2000, beer overtook wine production, and today leads by nearly two billion liters a year to one.[1][38]

Other manufactured goods include textiles and leather, plastics and tires, forestry products, publishing, cement, glass and tobacco products. Nearly half the industries are based in and around Buenos Aires, although Córdoba, Rosario, and Ushuaia are also significant industrial centers. The latter city became the nation's leading center of electronics production during the 1980s, and will supply the majority of the nation's laptop market by 2013.[39] Construction permits nationwide covered nearly 20 million m² (215 million ft²) in 2007. The construction sector accounts for over 5% of GDP, and two-thirds of the construction was for residential buildings.[7]

Argentine electric output totaled over 117 billion Kwh in 2010.[1] This was generated in large part through well developed natural gas and hydroelectric resources. Nuclear energy is also of high importance,[40] and the country is one of the largest producers and exporters, alongside Canada and Russia of cobalt-60, a radioactive isotope widely used in cancer therapy.

Services

The service sector is the biggest contributor to total GDP, accounting for over 60%. Argentina enjoys a diversified service sector, which includes well-developed social, corporate, financial, insurance, real estate, transport, communication services, and tourism.

The telecommunications sector has been growing at a fast pace, and the economy benefits from widespread access to mobile telephony (more than 75% of the population having access to mobile phones),[41] Internet (more than 16 million people online),[42] and broadband services. Regular telephone services with 9.5 million lines[43] and mail services are robust.

Exports and imports of services were US$12 billion each in 2009.[9] Business Process Outsourcing became the leading Argentine service export, and reached US$3 billion.[44] Advertising revenues from contracts abroad were estimated at over US$1.2 billion.[45]

Tourism is increasingly important and provided 8% of economic output (over US$25 billion) in 2008; over 80% of tourism sector activity is domestic.[46]

Banking

Main article: Banking in Argentina

Argentine banking, whose deposits exceeded US$90 billion in November 2010,[47] developed around public sector banks, but is now dominated by the private sector. The private sector banks account for most of the 85 active institutions (4,000 branches) and holds nearly 60% of deposits and loans, and there are as many foreign-owned banks as local ones.[48] The largest bank in Argentina by far, however, has long been the public Banco de la Nación Argentina. Not to be confused with the Central Bank, this institution now accounts for about a fourth of the total deposits and a seventh of its loan portfolio.[48]

During the 1990s, Argentina's financial system was consolidated and strengthened. Deposits grew from less than US$15 billion in 1991 to over US$80 billion in 2000, while outstanding credit (70% of it to the private sector) tripled to nearly US$100 billion.[49]

The banks largely lent US dollars and took deposits in Argentine pesos, and when the peso lost most of its value in early 2002, many borrowers again found themselves hard pressed to keep up. Delinquencies tripled to about 37%.[49] Over a fifth of deposits had been withdrawn by December 2001, when Economy Minister Domingo Cavallo imposed a near freeze on cash withdrawals. The lifting of the restriction a year later was bittersweet, being greeted calmly, if with some umbrage, at not having these funds freed at their full U.S. dollar value.[50] Some fared worse, as owners of the now-defunct Velox Bank defrauded their clients of up to US$800 million.[51]

Credit in Argentina is still relatively tight. Lending to the private sector has been increasing 40% a year since 2004, and delinquencies are down to 3%. Still, credit outstanding is, in real terms, about a fifth less than in 2000, and as a percent of GDP (around 15%),[47] quite low by international standards. The prime rate, which had hovered around 10% in the 1990s, hit 67% in 2002. Although it returned to normal levels quickly, inflation, and more recently, global instability have been affecting it again. The prime rate was over 20% for much of 2009, and 17% in the first half of 2010.[47]

Partly a function of this and past instability, Argentines have historically held more deposits overseas than domestically. The estimated US$140 billion in overseas accounts and investment exceeded the domestic monetary base (M3) by nearly 50% in 2009.[9]

Tourism

Main article: Tourism in Argentina

The World Economic Forum estimated that, in 2008, tourism generated around US$25 billion in economic turnover, and employed 1.8 million. Tourism from abroad contributed US$ 4.3 billion, having become the third largest source of foreign exchange in 2004. Around 4.6 million foreign visitors arrived in 2007, yielding a positive balance vis-à-vis the number of Argentines traveling abroad.[46] [52][53]

Argentines, who have long been active travelers within their own country,[54] accounted for over 80%, and international tourism has also seen healthy growth (nearly doubling since 2001).[46] Stagnant for over two decades, domestic travel increased strongly in the last few years,[55] and visitors are flocking to a country seen as affordable, exceptionally diverse, and safe.[56]

INDEC recorded 2.3 million foreign tourist arrivals in 2007 (a 12% increase), at the Ministro Pistarini International Airport, alone (around half the total); of these, 26 % arrived from Brazil, 25 % from Europe, 14 % from the United States and Canada, 8 % from Chile, 19 % from the rest of the Western Hemisphere and 8 % from the rest of the World.[57]

Trade and investment

Main article: Foreign trade of Argentina

Argentine exports are fairly well diversified. However, although agricultural raw materials were 20% of the total exports in 2010, agricultural goods including processed foods still account for over 50% of exports. Soy products alone (soybeans, vegetable oil) account for almost one fourth of the total. Cereals, mostly maize and wheat, which were Argentina's leading export during much of the twentieth century, make up less than one tenth now.[58]

Industrial goods today account for over a third of Argentine exports. The country exported 448,000 motor vehicles in 2010, mostly to Brazil.[59] Motor vehicles and auto parts are the leading industrial export, about 10% of the industrial exports. Chemicals, steel, aluminum, machinery, and plastics account for most of the remaining industrial exports. Trade in manufactures has historically been in deficit for Argentina, however.[19] Accordingly, the system of non-automatic import licensing was extended in 2011,[60] and regulations were enacted for the auto sector establishing a model by which a company's future imports would be determined by their exports (though not necessarily in the same rubric).[61]

A net energy importer until 1981, Argentina's fuel exports began increasing rapidly in the early 1990s and today account for about an eighth of the total. Refined fuels make up about half. Exports of crude petroleum and natural gas have recently been about around US$3 billion a year.[58]

Argentine imports have historically been dominated by the need for industrial and technological supplies, machinery, and parts, which were US$38 billion in 2010 (two-thirds of total imports). Consumer goods including motor vehicles make up most of the rest.[58] Trade in services, historically in deficit for Argentina, is currently balanced at around US$12 billion each way.[9]

Direct investment in Argentina by the U.S. is mainly in telecommunications, energy, financial services, chemicals, food processing, and vehicle manufacturing. The U.S. direct investment in Argentina approached $16 billion at the end of 1999, according to the embassy estimates. Investments from Canada, Europe, Chile, and other countries have also been significant. In all, foreign nationals hold around US$80 billion in direct investment.[9]

Brazil has, since 2000, also became an important investor in Argentine assets and Spanish companies in particular have entered the Argentine market aggressively, with major investments in the petroleum and gas, telecommunications, banking, and retail sectors. Several bilateral agreements play an important role in promoting U.S. private investment. Argentina has an Overseas Private Investment Corporation (OPIC) agreement and an active program with the U.S. Export-Import Bank. Under the 1994 U.S.-Argentina Bilateral Investment Treaty, U.S. investors enjoy national treatment in all sectors except shipbuilding, fishing, nuclear-power generation, and uranium production. The treaty allows for international arbitration of investment disputes.

Argentina attracted $3.4 billion in foreign direct investment (FDI) in 2006;[62] as a percent of GDP, this FDI volume was below the Latin American average. Current Kirchner Administration policies and difficulty in enforcing contractual obligations had been blamed for this modest performance.[63] FDI then accelerated, reaching US$8 billion in 2008,[64] while slowing to US$4 billion in 2009 and recovering to US$6.2 billion in 2010.[65]

Energy

Main article: Energy in Argentina

The electricity sector in Argentina constitutes the third largest power market in Latin America. It relies mostly on thermal generation (54% of installed capacity) and hydropower generation (41%), with new renewable energy technologies barely exploited. The country still has a large untapped hydroelectric potential. However, the prevailing natural gas-fired thermal generation is at risk due to the uncertainty about future gas supply.

Faced with rising electricity demand (over 6% annually) and declining reserve margins, the government of Argentina is in the process of commissioning large projects, both in the generation and transmission sectors. To keep up with rising demand, it is estimated that about 1,000 MW of new generation capacity are needed each year. An important number of these projects are being financed by the government through trust funds, while independent private initiative is still limited as it has not fully recovered yet from the effects of the Argentine economic crisis.

The electricity sector was unbundled in generation, transmission and distribution by the reforms carried out in the early 1990s. Generation occurs in a competitive and mostly liberalized market in which 75% of the generation capacity is owned by private utilities. In contrast, the transmission and distribution sectors are highly regulated and much less competitive than generation.

Infrastructure

Main article: Transportation in Argentina

Argentina's transport infrastructure is relatively advanced.[66] There are over 230,000 km (144,000 mi) of roads (not including private rural roads) of which 72,000 km (45,000 mi) are paved,[67] and 1,575 km (980 mi) are expressways,[68] many of which are privatized tollways. Having doubled in length in recent years, multilane expressways now connect several major cities with more under construction.[69] Expressways are, however, currently inadequate to deal with local traffic, as 9.5 million motor vehicles were registered nationally as of 2009 (240 per 1000 population).[70]

The railway network has a total length of 34,059 km (21,170 mi).[71] After decades of declining service and inadequate maintenance, most intercity passenger services shut down in 1992 when the rail company was privatized, and thousands of kilometers of track (excluding the above total) are now in disuse. Metropolitan rail services in and around Buenos Aires remained in great demand, however, owing in part to their easy access to the Buenos Aires subway, and intercity rail services are currently being reactivated along numerous lines.

Inaugurated in 1913, the Buenos Aires Metro was the first subway system built in Latin America and the Southern Hemisphere.[72] No longer the most extensive in South America, its 52.3 km (32.5 mi) of track carry nearly a million passengers daily.[1]

Argentina has around 11,000 km (6,835 mi) of navigable waterways, and these carry more cargo than do the country's freight railways.[73] This includes an extensive network of canals, though Argentina is blessed with ample natural waterways, as well; the most significant among these being the Río de la Plata, Paraná, Uruguay, Río Negro and Paraguay rivers.

Aerolíneas Argentinas is the country's main airline, providing both extensive domestic and international service. Austral Líneas Aéreas is Aerolíneas Argentinas' subsidiary, with a route system that covers almost all of the country. LADE is a military-run commercial airline that flies extensive domestic services.

Issues

Compared economic performance of Argentina (100 = Latin American average GDP per capita PPP)

The economy recovered strongly from the 2001–02 crisis, and remained the 22nd-largest in purchasing power parity terms in 2010.[2] Some observers have questioned whether the country should still have a place in the G20, however, considering that since the first G20 summit in 1999 it has slipped from being the world's 16th-largest economy to the 28th largest in 2010 (in nominal terms).[74] A lobby representing US creditors who refused to accept Argentina's debt-swap programmes has campaigned to have the country expelled from the G20.[74] These holdouts include numerous vulture funds which had rejected the 2005 offer, and had instead resorted to the courts in a bid for higher returns on their defaulted bonds. These disputes had led to a number of liens against central bank accounts in New York and, indirectly, to reduced Argentine access to international credit markets.[75]

Argentina’s economy grew by 9% in 2010, and officially, income poverty declined to around 13%;[7] an alternative mesurement conducted by CONICET found that income poverty declined to 22.6%.[76][77] Argentina's unemployment rate in the fourth quarter of 2010 was reportedly down to 7.3% from 8.4% in the fourth quarter of 2009, according to INDEC data. Argentina's jobless rate has declined from 25% in 2002 largely because of both growing global demand for Argentine commodities and strong growth in domestic activity.[78]

Reliability of official statistics

Official CPI inflation figures released monthly by INDEC have been a subject of political controversy since 2007.[78][79][80] Official inflation data are disregarded by leading union leaders, even in the public sector, when negotiating pay rises.[81] Some private-sector estimates put inflation for 2010 at around 25%, much higher than the official 10.9% rate for 2010.[81] Inflation estimates from Argentina’s provinces are also higher than the government’s figures.[81] The government stands by the validity of its data, but has called in the International Monetary Fund to help it design a new nationwide index to replace the current one.[81]

The government threatens inflation analysts with fine of up to 500,000 pesos if they don't report how they calculate their inflation estimates, which these economists consider as an attempt to limit the availability of independent estimates.[81]

Inflation

High inflation has been a weakness of the Argentine economy for decades.[82] Inflation was unofficially estimated to be running at more than 25% annually in December 2010, despite official statistics indicating less than half that figure;[83] this would be the highest level since the 2002 devaluation.[82] Food price increases, particularly that of beef, began to outstrip wage increases in 2010, leading Argentines decrease beef consumption per capita from 69 kg (152 lb) to 57 kg (125 lb) annually and to increase consumption of other meats.[82][84] President Kirchner insists inflation is not a problem.[82]

Consumer prices for 2011 are expected to rise by 20 to 30%, leading the national mint to buy banknotes of its highest denomination (100 pesos) from Brazil at the end of 2010 to keep up with demand. The central bank is expected to pump at least 1 billion pesos into the economy in this way during 2011.[85]

Income inequality

Argentina, in relation to other Latin American countries, has a low level of income inequality. Its Gini coefficient of 37.8 (2011) is below that of Brazil (55.0), Chile (52.0), Colombia (58.5), Mexico (51.6) Uruguay (47.1) or Venezuela (43.4). The social gap is worst in the suburbs of the capital, where beneficiaries of the economic rebound live in gated communities, and many of the poor (particularly undocumented immigrants) live in slums known as villas miserias.[86]

In the mid-1970s, the most affluent 10% of Argentina's population had an income 12 times that of the poorest 10%. That figure had grown to 18 times by the mid-1990s, and by 2002, the peak of the crisis, the income of the richest segment of the population was 43 times that of the poorest.[86] These heightened levels of inequality had improved to 26 times by 2006,[87] and to 16 times at the end of 2010.[88] Economic recovery after 2002 was thus accompanied by significant improvement in income distribution: in 2002, the richest 10% absorbed 40% of all income, compared to 1.1% for the poorest 10%;[89] by 2010, the former received 29% of income, and the latter, 1.8%.[88]

Argentina has an inequality-adjusted human development index of 0.622, compared to 0.509 and 0.634 for neighbouring Brazil and Chile, respectively.[90] As of October 2011 the poverty rate is 8% and extreme poverty 3%.

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  52. ^ World Economic Forum
  53. ^ WTO: World Tourism Barometer
  54. ^ National Geographic Magazine. November, 1939.
  55. ^ "Gran número de turistas eligieron la ciudad de Mar del Plata". Hostnews.com.ar.
  56. ^ Luongo, Michael. Frommer's Argentina. Wiley Publishing, 2007.
  57. ^ INDEC: turismo internacional
  58. ^ a b c INDEC: foreign trade
  59. ^ ADEFA
  60. ^ "Licencias no Automáticas". Tiempo Argentino.
  61. ^ "Automotrices deberán exportar un dólar por cada dólar que importen". Tiempo Argentino.
  62. ^ ECLAC
  63. ^ Clarín (18 June 2008)
  64. ^ "Argentina, destino elegido por la inversión extranjera". Secretaría de Medios de Comunicación.
  65. ^ "La inversión extranjera directa en la Argentina subió 54% en 2010". Infobae.
  66. ^ Infrastructure. Argentina. National Economies Encyclopedia
  67. ^ ADEFA
  68. ^ Grupo Payne
  69. ^ La república digital. "Se dará inicio a las obras de la Autopista Mesopotámica". Retrieved 14 February 2008.
  70. ^ "DNRPA". DNRPA. Retrieved 25 April 2010.
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  72. ^ "Buenos Aires Transport Subway". Kwintessential.co.uk. Retrieved 25 April 2010.
  73. ^ Encyclopedia Britannica, Book of the Year (various issues): statistical appendix.
  74. ^ a b Argentina still tackling debt burden BBC News
  75. ^ Clarín (12 January 2010) Template:Es
  76. ^ "Línea de partida para combatir la pobreza, nota del diario". Página 12.
  77. ^ "El Impacto de la Asignación Universal por Hijo en Argentina" (PDF).
  78. ^ a b Argentina's 4Q Unemployment Rate Falls To 7.4% Wall Street Journal
  79. ^ Forero, Juan. "Doctored Data Cast Doubt on Argentina: Economists Dispute Inflation Numbers". Washington Post, 16 Aug 2009.
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  82. ^ a b c d Inflation, an Old Scourge, Plagues Argentina Again New York Times
  83. ^ Latin America sees uncertain 2011 BBC News
  84. ^ "La mesa de los Argentinos". 7 Días.
  85. ^ Argentina can’t print enough pesos Financial Times
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  87. ^ "La distribución del ingreso es peor". La Nación.
  88. ^ a b "El 10% más rico acapara el 28.7% de ingresos". La Voz del Interior.
  89. ^ "Income share held by highest 10%". The World Bank.
  90. ^ UN. International Human development indicators: Inequality-adjusted HDI value

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