Session and Year: Autumn 2008
Prepared by Marcelo M. Armando
TABLE OF CONTENTS
1 Republic of Argentina 3
1.1 Brief History 3
1.2 Important recent events 5
2 Macroeconomic study 7
2.1 Major Economic, Fiscal, monetary and International Indicators 7
2.2 Critical Problems 9
2.3 Future Prospects 11
ANNEX 1. Main macroeconomic indicators. 15
ANNEX 2. Argentina. Macroeconomic RADAR 16
1 Republic of Argentina
The Argentine Republic is a country in South America, constituted as a federation of 23 provinces and an autonomous city. It is the 2d largest country in South America by land area, and eighth in the world. Its continental area is 2,766,890 km², between the Andes mountainrange in the west and the southern Atlantic Ocean in the east and south. Argentina borders Paraguay and Bolivia to the north, Brazil and Uruguay to the northeast, and Chile to the west and south.
1 Brief History
Starting from mid XIX century, Argentine’ economy started its fast growth by exporting raw material, mainly livestock. This was the beginning of macroeconomic improvement of thecountry. Between 1870 and 1914, country’s economy kept a yearly growth rate above 5%. 
During 1919-1929 there was the golden years for Argentine’ economy, GDP was growing 3.61% per year defeating Canada, US and Australia and positioning the country as N6 worldwide. 
After crisis in 1929 caused by US Great Depression a new economic model was selected where agriculture as the main source ofGDP was replaced by industrialization with strong military influence, and the country was focused on export as well as substitution of import products by the ones produced in the country. The increase of export as % of GDP is presented on the Figure 1 below.
Fig. 1 Industrial export as percentage of GDP 1939-1943
In coincidence with the US “New Deal” (1933), Argentine’ economy gothigh influence from John Maynard Keynes and his Keynesian economic theory, where the government took strong position with new fiscal rules giving to the industry preponderance.
The selected economic policy with military intervention ended up into a different reality than the forecasted, losing the status of the country reached by the mid XX century.
During 80’s, it was a “Lost decade” for LatinAmerica, Argentina growth was minimum but as poverty remained low it kept low unemployment rate, the country could keep going.
During 90’s, there was a new policy of open economy and privatization of public service. High growth rate between 1991-1994 and 1996-1998, and Tequila effect (1995) showing how external economical incident could affect economy of Argentina due to globalization (negativegrow of GDP). 
.  By 2001 we can see the following distribution of GDP as presented in the Figure 2.
Fig. 2 GDP Distribution in Argentina, 2001
The Convertibility law of 90’s end up with economical, political and social crisis, default and standard of live went down. Nominal GDP decreased 64% at the end of 2002 with around 21.5% of unemployment. 
1.2 Important recentevents
With the new president Nestor Kirchner’ economic policy, Argentina got a 74% reduction of external debts for 80% of the debtors, including agreement to pay IMF in cash by this reducing 50% of the total amount. Another 20% of the debt is still in default.
Having stronger position after renegotiation of the external debts and surplus in the NX, Argentina reaches 2005 with distributionof GDP as presented in the Figure 3. 1
Fig. 3 GDP Distribution in Argentina, 2005
1.3 Current position in the world
The main components of export are mainly oilseed and cereals, petrol production is the 2d most important product for export which is contributing 20% to the total export. Other natural resources are adding up mining - 3%; fruit and vegetables – 3%; forestry and wood...