Argentina

Up until about the mid-20th century, much of Argentina's history was dominated by periods of internal political conflict between Federalists and Unitarians and between civilian and military factions. After World War II, an era of Peronist authoritarian rule and interference in subsequent governments was followed by a military junta that took power in 1976. Democracy returned in 1983, and has persisted despite numerous challenges, the most formidable of which was a severe economic crisis in 2001-02 that led to violent public protests and the resignation of several interim presidents. The economy has recovered strongly since bottoming out in 2002. The government renegotiated its public debt in 2005 and paid off its remaining obligations to the IMF in early 2006.

Main Airports

Ezeiza Ministro Pistarini International Airport (EZE)

U.S. Embassy

4300 Colombia Avenue in the Palermo district of Buenos Aires
(54)(11) 5777-4533/34

Statistics

GDP: purchasing power parity:

$518.1 billion (2005 est.)

GDP - real growth rate:

8.7% (2005 est.)

GDP - per capita: purchasing power parity:

13,100 (2005 est.)

Inflation rate (consumer prices):

9.6% (2005 est.)

Labor force:

15.34 million (2005 est.)

Exports:

$40 billion f.o.b. (2005 est.)

Exports - partners:

Brazil 15.4%, US 10.9%, Chile 10.5%, China 8.4%, Spain 4% (2005)

Imports:

$28.8 billion f.o.b. (2005 est.)

Imports - partners:

Brazil 34.7%, US 16.9%, China 5.5%, Germany 5.3% (2005)

Population:

39,921,833 (July 2006 est.)

Population growth rate:

0.96% (2006 est.)

Population Below Poverty Line:

38.5% (June 2005)

Major Industries:

food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel

Employing Workers: 138*

Registering Property: 74*

Enforcing Contracts: 68*

Closing a Business: 58*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Argentina	Region
Procedures (number)	15	10.2
Time (days)	32	73.3

Argentina Risk Assessment

Country Rating

Rating: C

A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behaviour. Corporate default probability is high.

Risk Assessment

The repercussions of the 2007 international financial turmoil on the real economy should remain limited. Growth will be more moderate in 2008 although still driven by domestic demand spurred by still relatively accommodating economic policy. Still benefiting from strong world demand for commodities and from an undervalued peso, exports should allow Argentina to run a current account surplus again and substantially increase foreign exchange reserves.

With foreign debt declining after its partial cancellation in 2005 and early IMF repayment in 2006, the relevant ratios should continue to improve. Argentina will, however, have to normalise its relations with foreign creditors, which could happen in the wake of Cristina Kirchner's election as president in October 2007.

Although a fiscal surplus is also expected in 2008, lasting improvement in public finances will depend on adoption of truly tight fiscal policy that the new administration could decide to implement gradually.
The disquieting increase in inflation despite price controls and index adjustments reflects economic overheating and bottlenecks. Argentina has particularly suffered from a lack of investment, especially in the energy and transport sectors, undermined by a shaky business environment and interventionist economic policy.

That context notwithstanding, the financial health of private companies has continued to improve, particularly in the car industry, construction, communications, and tourism, as well as in an agricultural sector buoyed by a record harvest. The shakiest sectors include food, due to price control and export restrictions, oil refining, due to insufficient investment, utilities (water, electricity, gas, transportation) because of regulated prices, and tobacco, which is suffering from a drop in demand. In total, the Coface payment experience on private companies has been relatively satisfactory.

STRENGTHS

• Endowed with abundant natural, energy, mineral and agricultural resources, Argentina has benefited from the strong world demand and high prices for raw materials.
• The undervalued local currency has benefited domestic production and export competitiveness.
• The country's education level and human development indicators have been substantially above the Latin American average.
• The work force is skilled and adaptable.

• The economy continues to be partially dependent on raw materials and to suffer from insufficient investment particularly in the energy sector and infrastructure.
• Despite the restructuring of its bond debt on favourable terms in June 2005 and early IMF repayment in January 2006 foreign debt is still high.
• Sustained improvement in public finances will depend on implementation of genuinely tight fiscal policy.
• Good performance by the economy will require an improved business environment and a steadier legal framework.
• Substantial inequality and social tensions have persisted.

• Agriculture
• Apparel
• Arts & Crafts
• Automobile
• Bags, Cases & Boxes
• Chemicals
• Computer Hardware & Software
• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
• Machinery
• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation