Argentina is the third-largest economy in Latin America with a GDP of US$632.24 billion in 2022 and a population of 46.9 million spread among 23 provinces as of January 2023. It is considered one of the most urbanized nations in the world with approximately 92 percent of the population concentrated in urban areas. Nearly 46 percent live in Buenos Aires (Capital and Province) and another 20 percent is 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 unfavorable climatic conditions continue to affect the agricultural sector, from which most of the Central Bank reserves are generated, adding more pressure on an economy that was already in recession because of the COVID-19 pandemic. The country saw positive GDP growth in 2021 (10.4 percent) and in 2022 (5.2 percent), however, other indicators provide a wider lens to view the challenging economic environment. The poverty rate remains high at almost 40 percent and accumulated inflation has already surpassed 113 percent in July 2023. The Argentine peso depreciated approximately 33 percent against the U.S. dollar between 2022 and 2023. As of September 21, 2023, the official exchange rate is US$1:AR$366.64, while the unofficial exchange rate is US$1:AR$740.
Despite slowing economic activity and erosion of local purchasing power, U.S.exports of goods and services to Argentina increased 55 percent in 2022. U.S. exports totaled US$19.68 billion and imports from Argentina to the United States were US$9.75 billion. As a result, the U.S. recorded its tenth consecutive trade surplus, valued at approximately $9.9 billion, and was the third largest trading partner of Argentina. Almost 90 percent of U.S. merchandise exports are used in local industry and agriculture, including chemicals, industrial supplies and materials, petroleum & coal products, and oil & gas equipment. Information & communication and travel services (for all purposes including education) are the top service export categories by the United States to Argentina. Leading Argentine exports to the United States include crude oil & gas, processed foods, chemicals, and agricultural products. Travel and transport are the leading service exports from Argentina to the United States.
The United States is Argentina’s top foreign direct investor, totalling US$131.6 billion in the last 10 years. There are more than 300 U.S. companies present in Argentina, some whose presence dates back more than 100 years. Despite the current macroeconomic challenges, there are significant opportunities for U.S. companies in energy, mining, health, agriculture, information technology, and safety & security, among others. U.S. companies are widely respected in Argentina for their good business practices, transparency, corporate social responsibility, 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 use.