Argentina: an overview

Supporters of Argentina wave a national flag. Credit: Getty Images

Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector and a diversified industrial base. However, the country suffered greatly during the 20th century from recurring economic crises, persistent fiscal and current-account deficits, high inflation, mounting external debt and capital flight. A severe depression, growing public and external debt and a bank run culminated in 2001 in the most serious economic, social, and political crisis in the Argentina's turbulent history.

The interim president, Adolfo Rodríguez Saa, declared a large default on the government's foreign debt in December 2001, and his successor, Eduardo Duhalde, announced an end to the peso’s decade-long 1:1 peg to the US dollar in early 2002.

Nestor Kirchner, president between 2003 and 2007, played a large role in rescuing Argentina’s economy. However, Cristina Fernandez Kirchner became president in late 2007 and the rapid economic growth of previous years began to slow sharply over the following year as government policies held back exports and the world economy fell into recession.

The economy has rebounded strongly from the 2009 recession. However, the government’s continued reliance on expansionary fiscal and monetary policies risks exacerbating already high inflation.