An overview of Argentina`s Economy and the State of its Economic Research Paper

An overview of Argentina`s Economy and the State of its Economic Progress - Research Paper Example ?s interim President, Adolfo Rodriguez Saa, announced a default on foreign debt of the government, which was the largest in the country’s economic history. Adolfo stepped down just a few days after assuming office. In early 2002, Adolfo’s successor, Eduardo Duhalde put to an end the pegging of the peso to the United States dollar. During that year (2002), Argentina’s economy declined with real Gross Domestic Product (GDP) at 18 percent smaller than GDP in 1998. Approximately 60 percent of Argentines fell below poverty line in the same year. However, Argentina’s real GDP bounced back and achieved annual growth rate of 8.5 percent from 2003 to 2008. This rebound was attributed to increased industrial capacity and literate workforce. The growth in real GDP was also as a result of Argentina’s debt restructuring and reduction, implementation of expansionary monetary and fiscal policies and favorable global financial conditions. Argentina’s Growth and Productivity from 1961-2006 Period GDP % TFP 1961-1970 1971-1980 1981-1990 1991-2000 2001-2006 4.4 2.6 -0.8 4.1 4.1 1.2 -0.1 -1.3 1.4 1.0 1961-2006 2.7 0.4 Source: MECON and Coremberg et al. (2007). In early 2007, Argentina faced increased rate of inflation. The government led by President Nestor KIRCHNER, responded to the inflation by imposing taxes on exports as well as export restraints. There were also price restraints on businesses across the country. However, in late 2007 when Cristina Fernandez De Kirchner succeeded her husband as the president of Argentina, the swift economic growth that had been experienced in the last six years began to stall. In 2008, the government of Argentina held back its exports before the 2008 recession hit global economies. In 2010 he country’s economy bounced back from economic... This paper offers a comprehensive analysis of the economy of Argentina in the last decades and estimates the progress of the country’s economy over the years. Argentina has an interesting economic history and is one of the most researches about countries owing to the fact that it had attained advanced development status by the beginning of the 20th century, but its economic growth retarded afterwards. The country’s high rate of economic growth has been discontinuous following serious economic recessions, especially during the twentieth century. Argentina is amongst the countries endowed with rich natural resources. The country has very high literacy level. The agricultural sector is export-oriented with the nation’s industrial sector highly diversified. Because of intermittent economic crises, unrelenting deficits in its fiscal and current accounts, high and ever growing external debts as well as capital flight, especially during the twentieth century, Argentina slipped from its advanced economic status The economic recession of December 2001 is considered the worst recession in Argentina’s history. On December 2001, Argentina’s interim President, Adolfo Rodriguez Saa, announced a default on foreign debt of the government, which was the largest in the country’s economic history. After the wrath of the 2009 global economic downturn, the economy of Argentina has not been very stable. In 2012, the country’s economy experienced a sharp slowdown. However, the economy showed some signs of recovery at the beginning of 2013.