With political uncertainty and weak public finances, Argentina is not out of the woods

D4

HIGH RISK

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

Updated in September 2021.

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GDP USD 383.1bn (World ranking 28, World Bank 2020)
Population 45.4mn (World ranking 32, World Bank 2020)
Form of state Presidential republic
Head of state Alberto Fernández (President)
Next elections October 2021, legislative
  • Structurally high inflation
  • Weak fiscal account and a recent track record of sovereign default
  • Reliance on commodities, resulting in exposure to external shocks
  • Capital controls in a context of recurring FX shortages
  • Vulnerable to changes in agricultural prices
  • Macroeconomic imbalances and a weakened institutional framework
  • High inflation
  • Nine sovereign defaults, two in the past 20 years.

Trade structure by destination/origin

(% of total, annual 2020)

Exports Rank Imports
Brazil 14.8%
1
20.8% Brazil
China 9.7%
2
20.7% China
United States 6.1%
3
10.4% United States
Chile 5.4%
4
5.3% Paraguay
Vietnam 5.3%
5
4.8% Germany

Trade structure by product

(% of total)

Exports Rank Imports
Feedstuff for animals (excluding unmilled cereals) 17.7%
1
15.0% Road vehicles
Cereals and cereal preparations 16.7%
2
6.5% Other industrial machinery and parts
Road vehicles 9.5%
3
5.9% Electrical machinery, apparatus and appliances, n.e.s.
Fixed vegetable oils and fats, crude, refined or fractionated 8.7%
4
4.6% Oil seeds and oleaginous fruits
Oil seeds and oleaginous fruits 5.8%
5
4.3% Medicinal and pharmaceutical products
The payment behavior of domestic companies is poor and the average DSO is excessive.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

  • Payments

  • Court proceedings

  • Insolvency proceedings

Procedural delays are common and costs are high. Considering the inability of domestic courts to cope with the caseload in a timely manner, commencing legal action without having first conducted pre-legal action is unwise.

For insolvent debtors debt renegotiation mechanisms have been put in place, however in practice, liquidation remains the default procedure even though it is never in the interest of unsecured debtors.

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