ARGENTINA

Bad timing for a debt restructuring

D4

HIGH RISK

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD519.872bn (World ranking 24, World Bank 2018)
Population 44.49mn (World ranking 32, World Bank 2018)
Form of state Presidential republic
Head of government Alberto Fernández
Next elections 2021, legislative midterms
  • Government commitment to correct imbalances
  • Developed industrial fabric
  • Skilled workforce compared to the region
  • Vulnerable to changes in agricultural prices
  • Macroeconomic imbalances and a weakened institutional framework
  • High inflation

Trade structure by destination/origin

(% of total)

Exports Rank Imports
Brazil 16%
1
25% Brazil
China 8%
2
19% China
United States 7%
3
13% United States
Vietnam 4%
4
5% Germany
Chile 4%
5
3% Mexico

Trade structure by product

(% of total)

Exports Rank Imports
Feedstuff for animals (excluding unmilled cereals) 19%
1
17% Road vehicles
Road vehicles 13%
2
7% Other industrial machinery and parts
Cereals and cereal preparations 9%
3
6% Telecommunication and sound recording apparatus
Fixed vegetable oils and fats, crude, refined or fractionated 8%
4
6% Electrical machinery, apparatus and appliances, n.e.s.
Oil seeds and oleaginous fruits 8%
5
6% Gas, natural and manufactured
The payment behavior of domestic companies is poor and the average DSO is excessive.

  • Low

  • Medium

  • Sensitive

  • High

  • 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.

Euler Hermes

Economic Research Team

research@eulerhermes.com

Georges Dib

Economist for Latin America, Spain and Portugal

georges.dib@eulerhermes.com

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