Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
Argentina is the third-largest economy in Latin America, with a population of 47.3 million spread among 23 provinces and the city of Buenos Aires. Approximately 92 percent of the country’s population is concentrated in urban areas, with 45 percent living in Buenos Aires (Capital and Province), and another 20 percent distributed in the provinces of Córdoba, Santa Fe, and Mendoza. The country has a talented and educated workforce, but its population has experienced economic turbulence over the last 75 years.
The economic outlook in Argentina remains challenging as the COVID-19 pandemic added additional pressure on an economy that was already in recession from 2018 through 2020. The country saw positive GDP growth (10.3 percent) in 2021 for the first time in three years, however, other indicators provide a wider lens to the struggling ecnomic environment. The poverty rate remains high at 37.3 percent and inflation hit 50.9 percent at the end of 2021 and is likely to exceed 70 percent in 2022. The official exchange rate of the Argentine peso to the U.S. dollar depreciated 14.7 percent in 2021 compared to 2020. As of July 26, 2022, the official exchange rate is approximately US$1:AR$136, while the parallel CCL rate is US$1:AR$326
Due to slowing economic activity and erosion of local purchasing power, U.S.exports of goods and services to Argentina declined from $18.3 billion (2018) to $12.5 billion (2021). Nevertheless, the U.S. recorded its tenth consecutive trade surplus, which was of approximately $5.7 billion in 2021, positioning the country as the third most important trade partner of Argentina. Approximately 90 percent of U.S. merchandise exports are used in local industry and agriculture, including chemicals, computer & electronic products, machinery (excluding electrical equipment), petroleum & coal products, and oil & gas. Information & communication and travel services are the top service export categories by the United States to Argentina. Leading Argentine exports to the United States include primary metal manufactured goods, oil & gas, processed foods, chemicals, and agricultural products. Travel and transport are the leading service exports for Argentina to the United States.
The United States is a top source of foreign direct investment in Argentina, totalling $8.73 billion (2020). There are more than 300 U.S. companies present in Argentina, some whose presence dates back more than 100 years. Despite current macroeconomic challenges, there are significant opportunities for U.S. companies in sectors such as energy, mining, health, agriculture, information technology, and infrastructure. U.S. companies are widely respected in Argentina for their good business practices, transparency, corporate social responsibility activities, high quality, and good customer service.
Reasons why U.S. companies should consider exporting to Argentina:
- Argentina is a resource-rich country with enormous potential for further development. The country has the second-largest shale gas and fourth-largest shale oil reserves in the world, as well as abundant solar and wind energy resources.
- Argentina features the third-largest proven lithium reserves, after Chile and Australia, and is expected to become a leading exporter over the next decade. More than 70 percent of Argentina’s proven lithium resources are yet to be exploited.
- U.S. expertise, technology, and equipment are needed to further develop critical sectors of the economy, such as energy, mining, information & communications technology, infrastructure, and agriculture, among others.
- The country is digitally capable, with high internet penetration and smart phone dissemination.