Argentina’s embrace of heterodox economic policies has resulted in a highly distorted economy with persistently high inflation.  Businesses and consumers are constrained by a widespread set of trade, financial, capital, price, and foreign exchange controls. The country’s current program with the International Monetary Fund requires fiscal discipline in order to receive disbursements. Initial projections had GDP increasing by 3.6 percent in 2022, but that estimate preceded Russia’s invasion of Ukraine and the global impacts it has caused.   Moreover, political discord among the government has affected market confidence, likely affecting growth estimates.

Additionally, in an effort to protect domestic production vis-à-vis imports and preserve its foreign exchange reserves, the Argentine government imposes import barriers and regulatory burdens that adversely affect foreign products and services. Importers experience delays or denials of  licenses to import intermediate goods and inputs, and face strict limitations on their ability to access foreign currency to pay for imported goods or services.

Current global events also affect the Argentine market. Rising inflation across the globe has prompted Argentine producers to request more dollars from the Central Bank in order to import the same quantity of intermediate goods. Additionally, the Russia-Ukraine war has affected the prices related to international logistics services as well as agriculture and energy commodities.

Other business challenges include persistent and systemic corruption, a lack of regulatory coherence, weak intellectual property rights protection, inefficient customs and legal processes, poor infrastructure, costly labor, and the limited availability of financing.