Argentina Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Argentina Country Risk Report
Product Price
$1,195.00

Core Views

  • A substantial uptick in investment is likely following a devaluation and liberalisation of Argentina's external accounts in 2016. Nonetheless, this will likely not begin until the latter half of 2016, leading to a contraction in real GDP as private consumption declines with real purchasing power. Thereafter, Argentina will enter a period of robust growth as foreign investment flows into the country.

  • The government of president-elect Mauricio Macri will move to substantially reduce the country's budget deficit in the coming years by reducing government subsidies on electricity. This will serve to temper inflationary pressures as the government can move away from printing new pesos to finance its substantial deficit. Nonetheless, subsidy reduction will be gradual to limit the shock to consumers' disposable incomes.

  • A deal to end Argentina's ongoing technical default will be made by the end of H116 as the Macri government will prioritise the resolution. Without an agreement, the government's access to foreign currency is extremely limited, which would limit the liberalisation of the country's external accounts. Because of this, we view a deal with holdouts as the starting point of potential reform measures.

Key Forecast Changes

  • We have revised our real GDP growth forecast for 2016 from growth of 2.5% to a decline of 0.4% as given the changes to policy presented by a Macri-led government.

Key Risks To Outlook

  • The largest risk to our forecasts stem from potential pushback from the Frente para la Victoria in Argentina's legislature. The party maintains a majority of seats in the country's senate, and any deal with holdout investors to end Argentina's ongoing technical default is legally required to pass through the legislature. A deal would be the starting point for reforms to external accounts and without one, Argentina would risk a deeper recession in 2016.

  • The risks to our balance of payments forecasts for Argentina are weighted to the downside. Weak economic growth in key trade partners such as Brazil could weigh on Argentine export growth more than our forecasts currently anticipate. Moreover, soy revenues could disappoint on the back of unfavourable weather across the Americas region, dampening agricultural exports and hurting the current account balance. In addition, should the Argentine government revert back to anti-business policies, financial account outflows would likely put additional downward pressure on foreign reserves.

Macroeconomic Forecasts (Argentina 2013-2016)
Indicator 2013 2014 2015f 2016f
f=BMI forecast; Source: INDEC, BCRA, BMI
Real GDP growth, % y-o-y 2.9 0.4 0.7 -0.4
Nominal GDP, USDbn 610.2 599.4 629.5 554.1
Consumer price inflation, % y-o-y, eop 10.9 12.7 18.0 15.0
Exchange rate ARS/USD, eop 6.52 8.47 9.55 12.75
Budget balance, % of GDP -1.9 -2.3 -7.1 -5.5
Current account balance, % of GDP -0.8 -0.8 -0.3 0.9
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
PASO Results Point To Scioli Victory
8
TABLE: POLITICAL OVERVIEW
8
Long-Term Political Outlook
9
Economic Reforms Key To Political Stability
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity
14
Growth In 2016, Even In Light Of Devaluation
14
TABLE: GDP By Expenditure
14
Exchange Rate Policy
16
ARS: Switch To Managed Float In 2016
16
TABLE: BMI Curre ncy Forecast
16
Balance Of Payments
17
Greater Foreign Investment Due To Reforms
17
TABLE: Current Account
18
Fiscal Policy
20
Rising Interest Payments Will Reduce Fiscal Flexibility
20
TABLE: Fiscal Polic y
20
Regional Outlook
21
Weakening Outlook For Commodities Increasing Sovereign Risk
21
Chapter 3: 10-Year Forecast
25
The Argentine Economy To 2024
25
Energy Sector To Bolster Long-Term Growth
25
TABLE: Long-Term Macroeconomic Forecasts
25
Chapter 4: Operational Risk
29
SWOT Analysis
29
Operational Risk Index
29
Operational Risk
30
TABLE: Operational Risk Index
30
Market Size And Utilities
31
TABLE: Latin America - Market Size And Utilities Risk
32
International Security Risk
36
TABLE: Latin America - Interstate Security Risk
36
Chapter 5: Key Sectors
39
Pharmaceuticals & Healthcare
39
TABLE: Pharmaceutical Sales , Historical Data And Forecasts
40
TABLE: Healthcare Expenditure Trends , Historical Data And Forecasts
41
Telecommunications
43
TABLE: Telecoms Sector - Historical Data & Forecasts
44
Other Key Sectors
47
Table : Oil and Gas Sector Key Indicators
47
Table : Food and Drink Sector Key Indicators
47
Table : Infrastructure Sector Key Indicators
47
Table : Autos Sector Key Indicators
48
Table : Defence and Security Sector Key Indicators
48
Table : Freight Key Indicators
48
Chapter 6: BMI Global Macro Outlook
49
Global Macro Outlook
49
China Crisis To Have Far-Reaching Impact
49
Table : Global Assumptions
49
Table : Developed States , Real GDP GrowtH , %
50
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
50
Table : Emerging Markets , Real GDP Growth, %
51

Assess your risk exposure in Argentina with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Argentina with confidence.

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  • Delivery of the report in print, PDF and online formats
  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
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  • Access to our team of leading analysts who will be happy to answer any questions you might have about the data and forecasts included in this report