Companies and investment funds following the Argentine economy can be difficult to understand the floods available. In this post, we examine the fundamental issues of budget and inflation in the domestic economy and then the issue of external payments internationally.
Argentina is a country that has mostly experienced two -digit inflation that undermines investments and encourages the Argentines to put their wealth in safe currencies and tools to keep their value. The underlying cause of inflation is essentially institutional/political, where successive governments for the monetary emission of the central bank (ie printing money) instead of dealing with fundamental issues in the economy and balancing the budget.
At the end of 2023, he was elected President of the Argentines as President of Milei, who, although not unusual in many ways, planned confidence in the economy.
.png?width=753&height=415&name=inflation3%20(002).png)
Milei’s suggestion is to reduce the rate of inflation by balancing public finances.
.png?width=517&height=369&name=fiscal%20balance%20%25%20(002).png)
As you can see, this has been largely accomplished by a combination of expenditure and tax increases, and inflation is down, although this is about a year before being pushed out of the system due to lack of inflation.
Note that 16.5% of GDP is expected in 2025, which is low enough in Latin -American context.
It should be noted that the largest only item in government spending is social security, with 52% of the total. This is approx. 60% of the pensions and the remainder for other social benefits. Reducing budget balancing in 2024 is largely due to pension as a total inflation rate, but the progress of state promises according to inflation.
One of the significant changes in the state pension system came into force in March 2025. Generally, individuals had to make a 30 -year contribution to eligibility for a pension for state income, but consecutive governments have made the amnesties (moratoriums) such as to receive a lower number of contributions (see diagram):
In 2024, 73% of the new beneficiaries were amnesty (moratoriums). As of March 2025, the amnesties have been abolished and retirees are now only entitled to the underlying state minimum pension (PUAM) if they do not have a 30 -year contribution. Note that Argentina’s labor information is around 40-45%, but the individual can act as an alternative to the formal and informal economy, depending on the circumstances, and therefore find it difficult to make a 30-year contribution.
So, for summary purposes, the budget situation has been restored by reducing the true value of pensions, and since pensions make such a large share, the completion of contributions will be significantly lower, which allows the government to provide more space to divert investment projects.
External accounts
The internal budget situation is only part of the Argentine Conunder of Economics. The rest affect the external accounts. Below is the composition of government debt.
.png?width=600&height=435&name=deuda_1_0%20(002).png)
It can be seen that Argentina 2023 ends $ 267 billion in currency debt. To serve this debt, the country must earn a surplus in its exports to meet the outflow of interest. The poverty of the surplus of exports, which comes with its international creditors and the IMF. After approved Milei’s budget reforms, the IMF has undertaken this month (April 2025) to hand over its loan against free foreign currency convertible.
However, the international situation is not as bad as it seems. The National Institute of Statistics (INDEC) estimates that Argentina has a positive net international investment position (see the table below), mainly due to a large share of currency outside the formal financial system. This money in cash, crypto values, unlawful overseas bank accounts, shares and securities, overseas real estate and gold, etc.
In response $ 18 billion Returning to the banking system until the end of 2024. This initiative made it possible for individuals to be $ 100,000 tax -free and higher amounts that contain a modest tax rate. Consequently, in Argentine banks, foreign currency balls are about approx. $ 8 billionstretched out $ 24 billion Until September 2024.
It is crucial for Argentina to cooperate with its currency tools to boost the local economy. Because they are spent or invested domestically, the currency will lead to the central bank through the banking system, which can fulfill its external debt payment obligations.
Beyond the financial situation, Argentina can begin to export oil and gas from the huge palate spread. This can also increase exports to China, especially foods.
Argentina is relatively little affected by recent American tariffs.
Read our full report Argentina Economy 2024 For more information.
About the author: Paul Dixon is the founder of the Latin report. Economic articles are read very widely on a wide range of topics, and often ranked search results for months and even after the first publishing.
Latin report It attempts to interpret the huge amount of information available to understand the country economies. We write our reports from a long -term point of view and the country has been monitoring the country’s development for decades. We most of all let the data tell the story with the commentary of political events to illuminate the characteristics of the data. The purpose of the Latin meaning is the purpose of expression Views that keep their value over time and therefore need to help companies make long -term decisions. This is comparable to competitors’ reports with current analysis reports that are continuously reviewed.
