Argentina WT/TPR/S/277/Rev.1 
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  I. ECONOMIC ENVIRONMENT 
(1) OVERVIEW  
1. Argentina recorded annual GDP growth av eraging 7.1% in real terms between 2006 
and 2011, but the economy slowed abruptly in 2 009 in the wake of the international economic 
financial crisis.  GDP then expanded by roughl y 9% in both 2010 and 2011, fuelled by vigorous 
domestic demand and a strong export performance.  This growth performance produced a doubling of 
per capita GDP in dollar terms, from US$5,424 in 2006 to US$10,896 in 2011, together with a 
reduction in unemployment and poverty.  GDP growth  was weaker in 2012, however, at 2.4% in the 
first half of the year in relation to the same period in 2011. 
2. Argentina's economic growth was largely dr iven by the increase in domestic demand, 
although its exports have also  benefited greatly from favour able international conditions. 
The country's fiscal accounts have continued to ge nerate a surplus, mainly thanks to increased 
revenues, a large proportion of which comes fro m taxes on consumption, income/profits and 
international trade.  Nonetheless, inflation has also  been accelerating, with the Greater Buenos Aires 
Consumer Price Index rising by 10.2% in the 12 months to October 2012. 
3. The authorities have continued to promote a de epening of the credit market to finance the 
development of the various productive sectors.  Fo llowing a peak in 2009, the balance-of-payments 
current account surplus retreated sharply in 201 0 and 2011, partly because imports of goods and 
services outpaced the corresponding exports, but also  because outflows of investment earnings 
increased significantly. 
4. The Argentine authorities have been implementing a model that they define as growth with 
social inclusion;  and to attain the model's economic and social objectives, the authorities have 
adopted measures addressing income, fiscal, monetary, and trade policies, which in some cases are not the most suitable for efficiently achieving the go als being pursued.  For example, attempts have 
been made to decouple the effects of variations in  the international prices of export goods from their 
prices on the domestic market, by negotiating domes tic supply agreements with producers and by 
imposing export duties;  exchange restrictions ha ve been adopted and import control measures have 
been strengthened. 
(2) M
ACROECONOMIC TRENDS  
(i) Structure and evolution of the economy 
5. In response to robust international demand fo r raw materials and agricultural products, the 
sectoral composition of the Argentine economy cha nged in various ways during the review period 
(Table I.1).  The agriculture sector recorded a bove-average growth, than ks to the favourable 
international business climate, which translated into  high international prices for Argentina's exports.  
The GDP share of the agriculture sector (including fi shing and forestry), measured in current prices, 
rose from 7.5% in 2006 to 9.6% in 2011 (8.1% in 2012), largely reflecting higher agricultural prices.  
The authorities reported that the agriculture share of  GDP, measured in volume terms, declined by one 
percentage point in the period 2006-2011.  The share of manufactured goods in GDP also shrank, despite strong domestic market performance, partly  owing to the loss of competitiveness caused by 
the real appreciation of the Argentine peso during the review period.  Services regained their GDP 
share during the period. WT/TPR/S/277/Rev.1 Trade Policy Review 
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  Table I.1 
Basic economic indicators, 2006-2012 
 2006 2007 2008 2009 2010 2011 2012 
I.  Gross domestic product (PIB)        
Current GDP (Arg$ billion) 654 812  1,033 1,145 1, 443 1,842  2.164 
Current GDP (US$ billion)a  214 260 326 306 368 448 415 
Real GDP, growth rate (%) 8.5 8.6 6.8 0.8 9.2 8.9 1.9 
Per capita GDP (US$, current prices) 5,544 6,660 8,274 7,643 9,092 10,896 11,512 
By branch of economic activity (% of current GDP) 
Agriculture, hunting, forestry 7.5 8.4 8.8 6.7 9.0 9.6 8.1 
Fishing 0.3 0.2 0.2 0.2 0.2 0.1 0.1 
Mining and quarrying 5.5 4.4 3.5 3.4 3.3 3.1 3.4 
Manufacturing industries 20.6 19.5 19.5 19.6 18.8 18.9 17.7 
Electricity, gas and water 1.5 1.4 1.2 1.2 1.1 1.0 0.9 
Construction 5.3 5.7 5.5 5.3 5.1 5.3 5.4 
Wholesale, retail and repair trades 10.6 10.6 10.9 11.2 11.2 11.6 12.2 
Hotels and restaurants 2.5 2.5 2.4 2.4 2.3 2.2 2.1 
Transport, storage and communications 8.2 7.9 7.8 7.6 7.4 7.3 7.2 
Financial intermediation 4.3 4.5 4.7 5.2 5.3 5.2 5.8 
Real estate, business and rental ac tivities 10.1 10.1 10.1 10.6 9.7 9.1 8.8 
Public administration and defenc e 5.1 5.4 5.6 6.4 6.3 6.5 7.1 
Education, social services and h ealth 7.2 7.6 7.8 8.5 8.0 8.2 8.7 
Other social community service, personal and domestic 
service activities 3.8 3.8 3.7 4.2 3.8 3.5 3.5 
Financial intermediation services, indirect ly measured 0.7 0.7 0.7 0.9 0.8 0.8 0.9 
Value added tax 7.5 8.0 8.2 7.9 8.3 8.5 9.0 
Import duties 0.8 0.9 0.9 0.7 0.8 0.8 0.8 
II.  Other economic indicators (% of current GDP) 
Gross national saving 26.4 26.6 26.8 24.4 25.0 25.9 21.0b 
Gross domestic saving 23.0 24.2 25.1 21.2 24.5 26.2 22.2b 
III.  Employmentc        
Activity rate (%, end of period) 46.1 45.6 46.0 46.3 45.8 46.1 46.2 
Unemployment rate (%,end of period) 8.7 7.5 7.3 8.4 7.3 6.7 6.9 
Employment rate (%, end of period) 42.1 42.1 42.6 42.4 42.4 43.0 43.1 
Underemployment rate (%, end of period) 7.5 6.0 6.0 6.9 5.5 5.9 6.7 
IV.  Memorandum items   
Economically active population (EAP) 
(urban total, thousand) 16,031 15,981 16,348 16,531 16,536 16,978 .. 
Total population (million)d 38.6 39.0 39.4 39.7 40.1 40.9 .. 
.. Not available. 
a  Figures calculated using IMF exchange rate data. 
b  Data for the first quarter of 2012. 
c  As from the third quarter of 2006, quarterly data are provided for th e 31 urban agglomerates. 
d  INDEC data. 
Source: National Institute of Statis tics and Censuses of the Argentine Republ ic (INDEC), Central Bank of the Argentine 
Republic (BCRA), Ministry of the Economy and Public Fi nance (MEFP) and Interna tional Monetary Fund (IMF). 
6. Argentina enjoyed robust economic growth for most of the review period, as real GDP 
expanded at an average of 7.1% per year between  2006 and 2011.  GDP growth was sharply lower 
in 2009 as a result of the international economic fina ncial crisis, but rebounded in the following year 
at an annual rate of 9.2%.  This recovery was dr iven by the strong performance of Argentina's export 
products and the implementation of c ountercyclical measures, particularly fiscal policy, as can be seen 
by analysing the growth of current expenditu re as a percentage of GDP from 2009 onwards. 
7. GDP grew by 9.2% in 2010 and by 8.9% in 2011, fuelled by domestic demand, with 
consumption expanding at an average annual rate of  around 10% and investment growing even faster Argentina WT/TPR/S/277/Rev.1 
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  by over 20% in 2010 (Table I.2).  Investment increased by roughly 17% in 2011, mainly to purchase 
durable equipment, reflecting a greater need to e xpand productive capital at a time of high rates of 
installed capacity utilization.1  Construction expenditure also rose sharply, while consumption 
responded to the increase in earned income resulti ng from higher wages and employment, an increase 
in public transfers, and growing access to bank credit.  Private investment as a share of GDP declined 
as a result of the financial crisis in 2009, but has since recovered to account for 22.6% of GDP 
in 2011 and 21.8% in 2012. 
Table I.2 
Structure of GDP in expenditure terms, 2006-2012 
 2006 2007 2008 2009 2010 2011 2012a  
Percentage of current GDP   
Total consumption 71.4 71.5 71.1 73.5 72.2 71.6 73.7 
Private consumption 59.0 58.6 57.6 58.3 57.3 56.4 57.1 
Public consumption 12.4 12.9 13.4 15.2 14.9 15.1 16.6 
Gross fixed domestic investment 23.4 24.2 23.3 20.9 22.0 22.6 21.8 
Statistical discrepancy and changes in i nventory  -0.3 0.0 1.8 0.3 2.5 3.6 2.2 
Exports of goods and services 24.8 24.6 24.5 21.4 21.7 21.8 19.7 
Imports of goods and services 19.2 20.3 20.7 16.0 18.4 19.5 17.4 
Real annual growth (%, GDP at 
constant 1993 prices)         
Total consumption 7.4 8.8 6.6 1.5 9.1 10.7 4.9 
Private consumption 7.8 9.0 6.5 0.5 9.0 10.7 4.4 
Public consumption 5.2 7.6 6.9 7.2 9.4 10.9 6.5 
Gross fixed domestic investment 18.2 13.6 9.1 -10.2 21.2 16.6 -9.9 
Exports of goods and services 7.3 9.1 1.2 -6.4 14.6 4.3 -6.6 
Imports of goods and services 15.4 20.5 14.1 -19.0 34.0 17.8 -5.2 
a Preliminary figures.  
Source:   INDEC, BCRA, MEFP.  
8. In the first half of 2012, GDP growth slowed to an annualized rate of 2.4%2, although it 
continued to be sustained by the robust trend of  domestic demand, with to tal consumption accounting 
for over 70% of GDP.  Net exports made a negativ e contribution to GDP growth (-2.8%), partly 
reflecting a 3.8% deterioration in the terms of trade relative to the previous quarter.  
Annual real GDP growth in 2012 was 1.9%. 
9. Exports of goods and services grew at an av erage rate of 4.8% per year between 2006 
and 2011.  The global crisis caused a sharp slow down in 2008 and a further decline in 2009;  but 
in 2010 foreign sales grew by over 14% and continued to expand in 2011, led by commodities and their derivatives and supported by increased sales of manufactured products.  Goods and services 
imports outpaced the corresponding exports, grow ing at an average annual rate of 12.5% 
between 2006 and 2011.  While impor ts had grown by between 14% a nd 21% every year before the 
crisis, in 2009 they strongly contracted by 19% , before rebounding vigorously in 2010 and 2011 at 
rates of 34% and 17.8%, respectively.  Nonethel ess, in the second half of 2011 and in 2012, 
the year-on-year growth of imports slowed in a ll product categories.  Apart from the crisis year 
of 2009, net exports made negative contributio ns to GDP growth in the period 2006-2011, 
including -2.7% in the latter year. 
10. Unemployment fell steeply between 2006 and 2011, from 8.7% of the economically active 
population (EAP) in December 2006 to 6.7% in December 2011.  In the first half of 2012, however, 
                                                      
1 Central Bank of the Argentine Republic (BCRA) (2012a). 
2 BCRA (2012c). WT/TPR/S/277/Rev.1 Trade Policy Review 
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  with economic activity faltering, the rate rose to 7.2%.  Employment rose slightly between 2006 
and 2011, from 42.1% of the total pop ulation to 43%, the highest level in recent years;  but then eased 
slightly to 42.8% in the first half of 2012.  R eal wages are estimated to have increased during the 
review period3, and the general wage index surged by 90.9% in current terms between 2008 and 2011 
according to BCRA data.4 
11. Argentina's rapid economic growth betw een 2006 and 2012 resulted in a doubling of 
per capita GDP in dollar terms, from US$5,424 in 2006 to US$10,896 in 2011.  Gross per capita national income, as measured by the World Ba nk in purchasing power parity terms, rose 
from US$11,730 in 2006 to US$17,250 in 2011.
5  This made it possible to improve social indicators, 
which also reflect the application of employment-p romotion, wage-hike and other income policies.  
The proportion of the urban population living below the poverty line fell from 16% in 2007 to 6.5% in 2011
6, while the proportion of the population livin g on less than two US dollars a day dropped 
from 7% in 2006 to 2% in 2010.7 
12. The Argentine authorities see the income policy being implemented to protect the 
population's real incomes as the cornerstone of the gr owth-with-social-inclusion model.  As part of the 
strategy to protect real incomes, the aim has been  to maintain the price of goods in the basic shopping 
basket, by granting consumer subs idies and implementing policies such as export duties.  These are 
seen as intended to decouple the effects of variatio ns in the international prices of export goods from 
their prices on the domestic market, thus protecting the real incomes of the Argentine people.8  
Nonetheless, this policy also hurts exports by altering the terms of trade between tradable 
and non-tradable goods. 
(ii) Fiscal policy 
13. The MEFP, through its Finance Secretariat, is  responsible for formulating and implementing 
fiscal policy in Argentina. 
14. The 2012 General National Budget9 projects a primary surplus of 2.5% of GDP for 
the non-financial public sector, obtained through increased revenue collection and the selective 
allocation of primary expenditure, prioritizing so cial programmes and expenditure on education, 
science and technology, and infrastructure.10  Total income is estimated at Arg$506,576.2 million, 
equivalent to 24.3% of GDP, while total e xpenditure approved under the Budget Law amounts 
to Arg$505,130.0 million, or 24.2% of GDP, t hus generating a slight financial surplus. 
15. Although Argentina recorded a primary surplus throughout the review period, this shrank 
from 1.5% of GDP in 2011 to 0.1% of GDP in th e first quarter of 2012.  The national financial 
                                                      
3 BCRA (2012a). 
4 BCRA (2012c). 
5 Online information from the World Bank.  Viewed at:  http://databank.worldbank.org/ 
ddp/home.do?Step=3&id=4. 
6 Information provided by INDEC. 
7 Online information from the World Bank.  Viewed at:  http://databank.worldbank.org/ 
ddp/home.do?Step=3&id=4. 
8 Ministry of the Economy and Public Finance (2012a). 
9 The General National Budget encompasses the income and expenditure of central government, 
decentralized organizations, a nd social security institutions.  Public se ctor enterprises are not included in the 
budget, but only the transfer s that they receive to finance current an d capital expenditure.  Expenditure includes 
transfers made to provincial gove rnments and national universities. 
10 Ministry of the Economy and Public Finance (2012a). Argentina WT/TPR/S/277/Rev.1 
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  balance, which was in surplus between 2006 and 2008,  reported a deficit of 0.6% of GDP in 2011, 
following deficits of 0.5% of GDP in 2010 and 1.2% of GDP in 2009 (Table I.3). 
Table I.3 
National Government finances (accruals basis), 2006-2012 
(% current GDP) 
 2006 2007 2008 2009 2010 2011 2012a 
(1) Current income 18.1 20.3 21.4 23.1 24.7 25.3 26.4 
(2) Current expenditures 14.3 17.0 18.3 21.1 21.7 22.8 23.0 
(3) Economic result:  saving/dissaving (1-2) 3.8 3.2 3.2 2.0 3.1 2.5 3.4 
(4) Capital income 0.1 0.1 0.1 0.1 0.1 0.1 0.1 
(5) Capital expenditure 2.5 2.4 2.5 3.3 3.7 3.2 3.2 
(6) Total income (1+4) 18.2 20.4 21.5 23.2 24.8 25.4 26.5 
(7) Total expenditure (2+5) 16.8 19.4 20.7 24.4 25.3 26.0 26.4 
(8) Primary expenditure 14.9 17.2 18.5 22.0 23.6 23.8 24.0 
(9) Financial result 1.4 1.0 0.8 -1.2 -0.5 -0.6 0.2 
(10) Primary result 3.3 3.2 3.0 1.2 1.2 1.5 2.5 
Memorandum item        
Total gross public debt (US$ billion) 136.7 144.7 146.0 147.1 164.3 178.9 .. 
Total gross public debt (% GDP) 63.7 55.5 44.6 48.0 44.6 40.1 .. 
.. Not available. 
a Projected. 
Note: As interagency financing transactions  are undertaken between State entities, an in flow for one is an outflow for another or others. 
 When the fiscal statistics are presented on  a cash basis, they quantify the movement of funds independently of the fiscal year  to 
which they correspond.  When they are presented on accruals basis, the record-k eeping criterion reflects imputation in the 
corresponding fiscal year irrespective of when payment occurs. 
Source:  MEFP. 
16. The tax revenue share of total income shra nk during the period under review, from 19% 
of GDP in 2006 to 14.3% in 2011 (cash basis, Table AI.1).  This was largely offset by a doubling of 
the share of social security contributions, largely reflecting the nationalization of the pension system 
(see Chapter IV(6)(iii)(d)).  Among taxes, the shares of value added tax (VAT) and income/profits tax 
(impuesto a las ganancias ) increased during the period 2006-2011, from 7.2% of GDP to 8.4%, and 
from 5.3% to 6%, respectively.  The share of  export duties also rose, from 2.2% of GDP 
in 2006 to 2.9% in 2011 (Table AI.2).  Import duties represented 0.8% of GDP in 2011, as 
in 2006 - equivalent to 5.7% of the value of merchandise imports in 2011, compared to an average 
tariff of 11.6%. 
17. Tax expenses in 2012 are forecast at 2.35% of GDP, compared to an estimated 2.29% 
of GDP for 2011.11  In the latter year, more than half of such expenses corresponded 
to VAT exemptions, 22% to exempti ons from income/profits tax and the rest were mainly exemptions 
from social security contributions and fuels tax (T able I.4).  Table AI.3 provides estimates of tax 
expenses for each economic promotion regime and their share of GDP. 
                                                      
11 Tax expense is defined as the amount of revenue that the Treasury foregoes by granting a tax 
treatment other than that generally specified in tax legi slation, for the purpose of benefiting certain activities, 
zones, taxpayers, or consumption items.  In Argentina, tax expenses are defined as incentives that cause 
definitive losses in revenue collection.  Tax expenses do  not include the deferment of tax payments, accelerated 
depreciation for income/profits tax, or  advance reimbursement of tax credits in value added tax (VAT), because 
the revenue loss in the years in which th ese benefits are enjoyed is offset by higher tax payments in later years.  
See Ministry of the Economy and Public Finance (2012a). WT/TPR/S/277/Rev.1 Trade Policy Review 
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  Table I.4 
Tax expenses, 2006-2012 
(Percentage of GDP) 
Tax 2006 2007 2008 2009 2010 2011 2012
Total  2.13 2.20 2.08 2.06 2.14 2.29 2.35
Under tax regulations 1.61 1.66 1.67 1.69 1.60 1.72 1.78
Under economic promotion regimes 0.51 0.54 0.42 0.38 0.55 0.57 0.57
Value-added 1.10 1.13 1.07 1.08 1.14  1.19  1.23
Under tax regulations 0.82 0.87 0.83 0.85 0.87  0.93  0.96
Under economic promotion regimes 0.29 0.27 0.24 0.23 0.27  0.27  0.27
Profits 0.47 0.50 0.53 0.58 0.46  0.50  0.51
Under tax regulations 0.39 0.41 0.45 0.50 0.37  0.42  0.43
Under economic promotion regimes 0.09 0.09 0.08 0.08 0.09  0.08  0.08
Social security contributions 0.26 0.23 0.25 0.21 0.21  0.24  0.26
Under tax regulations 0.26 0.23 0.25 0.21 0.21  0.24  0.26
Fuels 0.16 0.13 0.11 0.11 0.19  0.21  0.21
Under tax regulations 0.16 0.13 0.11 0.11 0.12  0.12  0.11
Under economic promotion regimes 0.00 0.00 0.00 0.00 0.07  0.09  0.09
Foreign trade 0.12 0.17 0.07 0.05 0.10  0.11  0.11
Under economic promotion regimes 0.12 0.17 0.08 0.05 0.10  0.11  0.11 
Personal goods 0.02 0.02 0.02 0.02 0.02  0.01  0.01
Under tax regulations 0.02 0.02 0.02 0.02 0.02  0.01  0.01 
Internal 0.01 0.01 0.01 0.01 0.01  0.01  0.01
Under tax regulations 0.01 0.01 0.01 0.01 0.01  0.01  0.01
Presumed minimum profit 0.00 0.00 0.00 0.00 0.00  0.00  0.00
Under economic promotion regimes 0.00 0.00 0.00 0.00 0.00  0.00  0.00 
Miscellaneous taxes 0.01 0.01 0.01 0.01 0.02  0.01  0.02
Under economic promotion regimes 0.01 0.01 0.01 0.01 0.02  0.01  0.02 
Source: Finance Secretariat, Minist ry of the Economy and Public Finance (various years), Presupuesto:  Resumen . 
18. Argentina has a tax-revenue sharing system in  which the National Government collects most 
of the taxes and then makes transfers to th e provinces.  Law No. 23.548 of 7 January 1988 
(Federal Fiscal Revenue Sharing Law), defines how revenue is distributed between the nation and the 
provinces.  Revenue from all national taxes is shared, except for import and export duties and 
national taxes and contributions earmarked for specific purposes or areas;  or else it is allocated to 
works of national interest by agreement between th e nation and the provinces.  Of the total revenue 
collected and subject to distributi on, 42.34% is allocated to the na tion, 54.66% to affiliated provinces, 
2% to compensate for the relative level of th e provinces of Buenos Aires (1.5701%), Chubut, 
Neuquén and Santa Cruz (0.1433% each), and 1% for the National Treasury Fund for Contributions to 
the Provinces.12 
19. The Federal Fiscal Responsibility Law (Law  No. 25.917 passed on 24 August 2004) defined a 
number of rules to help consolidate fiscal and fi nancial management by the National Government and 
affiliated jurisdictions.  For example, it stipulates  that the rate of increase of primary public 
expenditure in the national and provincial budgets may not exceed the nominal GDP growth rate;  
it also sets limits on provincial debt and requi res provincial and local governments to obtain 
MEFP authorization before taking on further debt.  The Federal Fi scal Responsibility Regime entered 
                                                      
12 Revenue is distributed to the affiliated provinces in the following proportions:  
Buenos Aires 19.93%, Catamarca 2.86%, Córdoba 9.22%, Corrientes 3.86%, Chaco 5.18%, Chubut 1.38%, Entre Ríos 5.07%, Formosa 3.78%, Jujuy 2.95%, La Pampa 1.95%, La Rioja 2.15%, Mendoza 4.33%, Misiones 
3.43%, Neuquén 1.54%, Rio Negro 2.62%, Salta 3.98%, San Juan 3.51%, San Luis 2.37%, Santa Cruz 1.38%, 
Santa Fe 9.28%, Santiago del Estero 4.29% and Tucumán 4.94%. Argentina WT/TPR/S/277/Rev.1 
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  into force on 1 January 2005, and 21 jurisdictions had adopted it by August 2012.  The expenses of 
these jurisdictions account for about 90% of total consolidated provincial expenditure.13 
20. In response to the international financial crisis , the targets of the Federal Fiscal Responsibility 
Regime were redefined by Law No. 26.530 of 18 November 2009, and expenses aimed at promoting 
economic activity, sustaining the level of employment, and responding to the health emergency and 
social assistance needs were exempted from the cu ts in expenditure specified in Law No. 25.917 
during fiscal 2009 and 2010.  Decree No. 2.054/2 010 extended this provisi on to 2011 and 2012. 
21. In addition, Decree No. 206/2009 of 19 Marc h 2009 created the Federal Solidarity Fund, 
to finance health, education, hospita l, housing, or road infrastructure works in urban or rural areas in 
the provinces and municipalities, while explicitly pr ohibiting its use to finance current expenses.  
The Fund is financed with 30% of national State revenue obtained from export duties on soya, in all 
its varieties and derivatives.14  The monies in question are distributed among the provinces through 
the Bank of the Argentine Nation, in the percen tages defined in Law No 23.548 and amendments 
thereto.  Of total revenue collected by the provinces,  70% is used to finance infrastructure works in 
the provinces, while the other 30% is passed on to the municipalities. 
22. Having been in deficit in 2009, consolidated provincial public finances posted a net financial 
surplus equivalent to 0.99% of GDP and a net primary surplus of 1.26% of GDP in 2010.  This result reflected revenue growth of 35.2% in relation to 2009, which outstripped the 24.6% increase in total 
expenses.  Nonetheless, in 2010, ten provinces re quired a total of Arg$7, 543 million in financial 
assistance from the National Government.  In 2011 , the total provincial net financial outturn was 
expected to be roughly in balance.
15 
23. The authorities have been implementing a debt reduction policy since 2003.  The financing 
policy for 2012 included the objectives of obtaining th e funds needed to service the debt expiring in 
that year, for which the forecast primary surplus is  insufficient;  and to continue reducing the burden 
of future debt service in relation to projected public sector income. 
24. As part of its debt reduction policy, the Nati onal Government has adopted measures to reduce 
provincial debt.  Decree No. 660/2010 created th e Federal Debt Reduction Programme for the 
Argentine Provinces, with the aim of reducing the provinces' debt to the National Government by 
allocating available funds from the National Treasury Contributions Fund, created by Law No. 23.548 
of 26 January 1988, and rescheduling the resulti ng provincial debt.  U nder the debt reduction 
programme, the National Treasury Contributions Fund assigned Arg$9,643.7 million, to write 
off 14.7% of the provinces' eligible debt stock, while rescheduling the rest under more favourable 
terms, pursuant to the guidelines est ablished in Decree No. 660/2010.16 
                                                      
13 Buenos Aires, Catamarca, Cór doba, Corrientes, Chaco, Chubut , Entre Ríos, Formosa, Jujuy, 
La Rioja, Mendoza, Misiones, Neuquén, Río Negro, Salta, San Juan, Santa Cruz, Santa Fe, Santiago del Estero, 
Tucumán, Tierra del Fuego, Antártida and the South Atla ntic islands (see online information from the Ministry 
of the Economy and Public Finance.  Viewed at:  h ttp://www2.mecon.gov.ar/cfrf/inte grantes/integrantes.htm). 
14 The presentation of the motives underlying the decr ee states that the export duty is being used to 
strengthen solidarity by being directly channelled into education, health, sanitation, housing or road infrastructure (see Decree No. 206/2009 of 19 March 2009.  Viewed at:  http://www.infoleg.gov.ar/ 
infolegInternet/anexos/150000-154999/151520/norma.htm). 
15 Ministry of the Economy and Public Finance (2012a). 
16 The repayment conditions established were as follo ws:  (a) a grace period for interest payments and 
principal amortization until 31 December 2011;  (b) princi pal amortized in 227 consecutive monthly instalments 
equivalent to 0.439%, and a final instalment equivalent to 0.347% of the principal, to be paid as WT/TPR/S/277/Rev.1 Trade Policy Review 
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  25. The debt reduction policy and high rates of GDP  growth, supported by the primary surpluses 
generated during the review period, made it possibl e to reduce the relative size of the public debt, 
from over 60% of GDP in 2006 to 41.6% in 2011 (Table I.3). 
(iii) Monetary and exchange rate policy 
26. Argentina's monetary and exchange rate policy is managed by the Central Bank 
of the Argentine Republic (BCRA).  During the revi ew period, changes were made to the Central 
Bank Charter, defined in Law No. 26.739 of 22 Ma rch 2012, including an alteration of the bank's 
functions and objectives.  This new framework sp ecified the purpose of the BCRA as "Providing 
monetary stability, financial stability, employment  and economic development with social equity, 
in accordance with its faculties and in the framework of policies established by the National 
Government" (Article 3 of Law No. 26.739).17 
27. The amended Charter still allows the BCRA to  extend temporary advances to the National 
Government for up to 12% of the monetary base;  and to make advances of up to 10% of the cash 
resources obtained by the National Government over the previous 12 months.  These advances have to 
be repaid within 12 months of being released.  Th e Charter also allows the bank to make temporary 
advances for an additional amount equivalent to  up to 10% of the cash resources received by 
the National Government in the last 12 months "on an exceptional basis and if the national or international economic situation or prospects so justify", with authority to make use of this 
exceptional faculty for a maximum of 18 months.  These advances must be repaid within 18 months of being released (Article 20).  Along with the amen dment to the Central Bank Charter, changes were 
also made to the Convertibility Law (Law No. 23.928 of 27 March 1991), eliminating the relation 
between the monetary base and international reserve s which the monetary authority had been required 
to observe.  Following these changes, the level of  required reserves that the BCRA must keep to 
implement exchange rate policy will be defined by  the Board of Governors.  Freely disposable 
reserves (surpluses) can be used to pay obliga tions contracted with international financial 
organizations or official bilateral external debt , provided that the monetary effect is neutral. 
28. The BCRA's monetary policy is founded on seven  broad lines of action:  (i) control of 
monetary aggregates;  (ii) deepening of productive cr edit;  (iii) managed floating of the exchange rate;  
(iv) accumulation of international reserves;  (v) prude ntial macro-regulation of financial capital flows;  
(vi) regulation and supervision of the financial system;  and (vii) universalization of access to 
financial services.
18  In its 2012 monetary programme, the BCRA noted that "monetary policy has a 
                                                                                                                                                                     
from January 2012;  (c) interest is capitalized on a monthly basis up to 31 December 2011, and payable 
monthly, with the first payment falling due in January 2012, and the applicable interest rate is 6% nominal per 
year;  (d) the debt is collateralized by allocating the amounts receivable by the provi nce through the federal tax 
revenue sharing regime.  These conditions were reformulated in MEFP Resolution No. 33/2011 of 23 December 2011, which extended  the grace period to 31 December 2012, and provided for amortization to 
be paid in 203 monthly instalments of 0.49% of the total, and a final instalment of 0.53%. 
17 The functions and faculties of the BCRA were defined in Article 4(b) of Law No. 26.739 as follows:  
(a) regulate the functioning of the fi nancial system;  (b) regulate the quantity of money and interest rate and 
regulate and channel credit;  (c) act as the national Stat e financial agent and depository and the country's agent 
in relation to international monetary, banking and financial institutions;  (d) concentrate and manage reserves of gold, foreign currency and other external assets;  (e) contribute to the good functioning of the capital market;  
(f) execute foreign exchange policy;  (g) regulate pa yment systems, settlement and clearance mechanisms, fund 
remitters and value transportation firms, and any othe r activity related to financial and foreign exchange 
activities;  and (h) oversee the protection of the rights of financial service users and the protection of 
competition. 
18 BCRA (2011b). Argentina WT/TPR/S/277/Rev.1 
 Page 9 
 
 
  role to play in economic development, for which reason it should contribute to maintaining 
equilibrium among macroeconomic variables to ensu re a sustainable growth path and adequate 
functioning of the financial system".  It also st ated that "monetary stability is understood in a broad 
sense and forms part of the general orientation of eco nomic policy", and that "the international context 
prevailing in the last four years has highlighted the need to extend coordination among the 
conventional objectives of monetary policy with  other functions, such as financial stability, 
sustainable growth, and job creation".19 
29. Since the 2006 monetary programme, the BCRA  has used M2 as its target monetary 
variable.20  The Central Bank defines quarterly ranges fo r M2 which leaves it sufficient flexibility in 
monetary policy to manage other variables that  could influence the liquidity of the economy 
("fine tuning"), such as control of the short-term interest rate through daily intervention in the repo 
market ( mercado de pases ), bond trading operations, and intervention in the exchange market.21  
The BCRA sterilizes all surplus monetary expansion,  basically by issuing bills and notes (LEBAC 
and NOBAC). 
30. In 2009 and 2010, the monetary programme reflect ed the need to respond to the international 
economic crisis, and a countercyclical policy was im plemented that included successive interest rate 
cuts on repo transactions, and measures to encourage lending to the private sector and to generate a 
deeper interest-rate futures market.22  In 2009, the year-on-year variation of private M2 was around 
the midpoint of the range estimated in the 2009  revised monetary programme (9.8%-18.9%).  
The buoyancy of peso-denominated fixed-term  deposits fuelled growth in the broadest 
peso aggregate, M3;  and interest rates on the lo cal money market fell in line with the reduction in 
the BCRA's policy rates.  The 2010 monetary prog ramme initially set average year-on-year growth 
targets of 14.3% for M2 and 14.0% for private M2 ;  but these were subsequently revised to take 
account of the fact that economic activity was growing faster than expected. 
31. Since 2011, the BCRA has been implementing a more expansionary monetary programme, 
based on a forecast of strong growth in the demand  for money in nominal terms.  In its baseline 
scenario, the programme predicted average variati ons for M2 and private M2 of 27.9% and 29.2%, 
year-on-year;  but the outturn was slightly abov e the centre of the band:  in December, M2 and 
private M2 displayed year-on-year growth rat es of 29% and 30.7%, respectively.  The baseline 
scenario of the 2012 monetary programme foresees 26. 4% year-on-year growth in December for M2 
and 26.2% for private M2, below the end-2011 figures of 28.8% and 30% (see Table I.5).  
Achievement of targets for M2 ceased to be compul sory in 2012, and M2 targets have no longer been 
set in the monetary programme since 2013. 
                                                      
19 BCRA (2011b). 
20 The sum of currency in circulati on, private and public sector current-account deposits in pesos, and 
private and public sector savings deposits in pesos. 
21 In the repo market (short-term bank transactions), the BCRA establishes a benchmark "corridor" for 
the short-term interest rate. 
22 BCRA (2009 and 2010). WT/TPR/S/277/Rev.1 Trade Policy Review 
Page 10 
  
  Table I.5 
Main monetary indicators, 2007-2012  
 2007 2008 2009 2010 2011 2012 
(June) 
Monetary variables    
Broad monetary base (% GDP) 10.5 9.9 9.4 9.5 10.6 11.1 
Broad monetary base (variation %) 25.4 10.5 11.5 31.6 34.6 33.9 
Total deposits, private sector (% GDP) 16.5 15.1 15.4 15.3 15.8 16.6 
Total loans, private sector (% GDP) 11.4 11.9 11.1 11.7 14.2 14.7 
M2 (% GDP) 15.8 16.0 15.5 15.3 16.2 16.6 
M2 (annual variation %) 18.0 18.8 13.6 28.1 28.9 31.5 
M2 (private) (annual variation %) 28.5 8.0 15.8 33.1 30.7 32.1 
M3 (% GDP) 26.1 24.7 23.5 24.5 26.3 27.0 
M3 (annual variation %) 20.6 11.3 11.2 35.6 30.3 29.5 
Interest rate ( end of period )   
Call in pesos, total 10.7 10.9 8.7 10.2 9.7 9.6 
Fixed term, in pesos, total (30 to 60 days) 9.6 16.4 9.7 10.2 12.8 12.8 
Fixed term, in dollars, total 1.0 1.7 0.6 0.4 0.4 0.5 
LEBAC (3 months) 10.7 12.5 12.8 11.0 14.0 11.5 
LEBAC (6 months) 8.3 12.8 13.6 11.7 14.0 12.3 
NOBAC, BADLAR private banks (1 year) 2.2 1.8 1.0 2.1 0.6 n/o 
Inflation (12-month rate of change)   
Consumer price index (Greater Buenos Aires) (IPC-GBA, retail prices) 
(2008=100) 8.5 7.2 7.7 10.9 9.5 9.9 
Wholesale price index (IPIM) (1993=100) 14.6 8.8 10.3 14.6 12.7 12.8 
Exchange rates       
Multilateral real exchange rate index (Dec. 01=100) 253.6 232.3 286.6 283.1 283.8 273.8  
Variation in the multilateral real exchange rate with Brazil (pesos/real) 19.0 -19.5 47.2 3.7 -3.2 -8.3 
Variation of the multilateral real exchange rate with the United States 
(pesos/US$) -1.3 1.9 6.3 -4.3 1.9 0.6 
Variation of the multilateral real exchange rate with the euro zone (pesos/€) 7.7 -3.8 12.3 -12.4 1.0 -3.4 
n/o No operations. 
Source: BCRA. 
32. The BCRA has implemented a managed floatin g regime for the exchange rate since 
Emergency Law No. 25.561 of 6 January 2002 am ended various aspects of the Convertibility Law 
and abolished the fixed exchange rate regime.  The exchange rate correction since floating was 
introduced in early 2002 has been greater than in neighbouring countries, reflecting the extent of the real exchange rate misalignment at the outset;  a nd the BCRA has intervened in the foreign-exchange 
market to reinforce the prudential international reserves accumulation policy, which it has continued 
to implement during the review period.  When targets were set for M2 and to prevent these 
interventions from putting these targets at risk, the BCRA used various monetary regulation 
techniques that partially sterilized the monetary  issuance associated with foreign-exchange 
purchases.
23  During the period January 2007-June 2012, th e nominal exchange rate has varied in 
different ways depending on the trading partner in qu estion, particularly in 2007 and 2008.  In 2009, 
there was a nominal depreciation against Argentina's three main trading partners (the European 
Union, the United States and Brazil);  whereas in 2010 the peso depreciated against the US dollar and 
the Brazilian real, while appreciating against the euro .  In 2011 and the first half of 2012, the peso 
                                                      
23 The early cancellation of rediscounts (through the "matching" programme and advance 
cancellations), repo operations, and the placement of Central Bank bills and notes with maturities between 
one month and two years, have been factors in the absorption of the monetary base. Argentina WT/TPR/S/277/Rev.1 
 Page 11 
 
 
  suffered a nominal depreciation in relation to the dol lar and euro, and a slight appreciation against the 
real.24 
33. Argentina's foreign exchange regulations require  exporters to convert all of their foreign 
currency earnings into pesos on the foreign exchange market.  This requirement  has been extended to 
exporters of oil, gas and mineral products since 2011 (Table AI.4).  In the case of services exports, 
there is also a requirement to convert all amounts effectively received in foreign exchange, net of 
withholding or discounts made abroad by the customer, on the foreign  exchange market.  This encompasses all exports of services provided by residents to non-residents.  Portfolio 
investments by non-residents, financial debts of the non-financial private sector and financial sector 
(except when intended for productive investments and/ or granted by international organizations), and 
initial share issues of resident comp anies that are not publicly trad ed must constitute non-interest 
bearing one-year deposits in US dollars for 30% of  the dollar equivalent of the total operation.  
In 2011, new regulations were issued governing access  to the local foreign exchange market for the 
purpose of paying for imports.  Among other thin gs, these restricted access to the amount of the 
purchase as agreed upon and provided that sales of fo reign exchange to pay for imports may only be 
made for payment by an individual cheque or debi t in the customer's local accounts, cash payments 
not being acceptable.  As from 1 July 2010, an import payments monitoring system (SEPAIMPO) 
has been implemented to ensure that such pa yments are backed by commercial transactions 
registered in Customs.
25  Since January 2012, all sales of foreign exchange, including for 
the purpose of travel and tourism, have requi red validation by the Federal Public Revenue 
Administration (AFIP) (Table AI.4).  New exchange  regulations were introduced in July 2012 through 
Communication A 5.318. 
34. Since 2008, the rate of change of the Greater Buenos Aires Consumer Price Index (IPC-GBA) 
has gathered pace, rising by 10.9% in 2010, 9.5% in  2011 and 9.9% in the 12 months to June 2012.  
In the 12 months ending October 2012, the index rose by 10.2%.26  For 2012 as a whole, the 
authorities had made an initial estimate of a 9.4% increase in the IPC-GBA27, while the IMF is 
forecasting increases of 9.9% in 2012 and 9.7% in 2013.28  Inflation has been stoked by robust 
domestic demand and high international commodity prices.  In February 2012, the IMF Executive 
Board approved a decision calling on Argentina to implement specific measures to improve the 
quality of reported IPC-GBA and GDP data.29  The World Bank, meanwhile, has estimated inflation 
in Argentina in 2011 at 17.2%.30  The wholesale price index also rose by 12.8% in the 12 months 
to September 2012, with the domestic component  rising by 13.1% and the imported component 
                                                      
24 BCRA, Communiqué No. 50.067, Evolución del Índice de Tipo de Cambio Real Multilateral. 
Junio de 2012 , 27 July 2012.  Viewed at:  http://www.bcra.gov.ar/pdfs/comytexord/P50067.pdf. 
25 The main foreign trade and exchange regulations in force in early 2012 were as follows:  
BCRA Communications "A" 1.722, 3.473, 4.634, 4.940, 5.060, 5.233, 5.245, 5.264, 5.265, 5.274, 5.295, 5.300, 
5.330 and 5.339;  BCRA Communication "C" 39.547;  Decrees Nos. 753/2004 and No 1.722/2011;  Resolutions 
Nos. 280/2009, 142/2012, 187/2012 and 231/2012, and AFIP General Resolutions Nos. 3.210/2011 and 3.252/2012. 
26 Online information from the BCRA, Radar macroeconómico .  Viewed at:  http://www.bcra.gov.ar/ 
pdfs/indicadores/Radar.pdf. 
27 Ministry of the Economy and Public Finance (2012a). 
28 Online information from the IMF.  Viewed at:  http://www.imf.org/extern al/country/ARG/index.htm. 
29 IMF, Press Release No. 12/30, "Statement by the IMF Executive Board on Argentina", 
1 February 2012.  Viewed at:  http://www.imf.org/external/spanish/np/sec/pr/2012/pr1230s.htm. 
30 Online information from the World Bank.  Viewed at:  http://www.worldbank.org/ 
en/country/argentina. WT/TPR/S/277/Rev.1 Trade Policy Review 
Page 12 
  
  by 8.4%.31  Certain monetary indicators, such as the grow th of M2, would also seem to suggest higher 
levels of price variation than those captured by the IPC-GBA.  On this point, the authorities emphasized that it was necessary to bear in mind that  the price variation levels in question occurred 
while the economy was growing rapidly, except in 2009. 
(iv) Balance of payments 
35. The current account of Argentina's balance of payments was in surplus in 
the period 2006-2010 and ended 2011 broadly in balance (Table I.6).  However, performance 
deteriorated in 2010 and 2011 and in the first qua rter of 2012, when the current account posted a 
deficit of US$552 million.  The year 2012 noneth eless ended with a surplus of US$479 million.  The 
increase in the surplus in 2009 is largely explained by a steep drop in imports, in the wake of the 
global financial crisis, although merchandise imports almost doubled between 2009 and 2011 as the 
economy recovered.  Nonetheless, the merchandise trad e balance continues to generate a large surplus 
(US$13,561 million in 2011) (Table  I.6).  Goods exports rose sharply between 2006 and 2008, before 
declining abruptly by more than 30% in 2009;  but they rebounded in 2010, virtually regaining 
their pre-crisis levels, and continue d to expand rapidly (by 31%) in 2011. 
Table I.6 
Balance of payments, 2006-2012 
(US$ million) 
 2006 2007 2008 2009 2010 2011 2012 
I.  Current account 7,768 7,354 6,756 10,995 1,360 1,568 479 
A.  Goods 13,958 13,456 15,423 18,526 14,266 13,207 15,642
Exports f.o.b. 46,546 55,980 70,019 55,672 68,134 83,950  81,205 
Imports f.o.b. 32,588 42,525 54,596 37,146 53,868 70,743  65,563 
B.  Services -501 -513 -1,284 -1,285 -1,160 -2,238  -3,460
Exports of services 8,023 10,363 12,156 10,967 13,648 15,605  15,235 
Imports of services 8,523 10,876 13,440 12,252 14,808 17,844  18,699 
C.  Income -6,150 -5,942 -7,552 -8,955 -11,345 -11,919  -11,307 
Investment income -6,090 -5,870 -7,494 -8,887 -11,279 -11,951  -11,261 
Interest -1,151 -629 -1,400 -2,260 -2,687  -3,367  -3,053 
Credit 3,993 5,072 4,205 2,140 1,718 1,678 1,586 
Debit 5,143 5,701 5,605 4,400 4,404 5,045  4,638 
Profits and dividends -4,939 -5,241 -6,094 -6,627 -8,593 -8,584 -8,208 
Credit 1,638 1,487 1,324 1,292 941 1,226 656 
Debit 6,577 6,728 7,418 7,919 9,534 9,810 8,863 
Other income -60 -72 -58 -68 -62 -48 -46 
D.  Current transfers 459 353  170 2,710 -405 -539 -397 
II.  Capital and financial account -5,401 5,680 -7,809 -9,330 3,406 -947  -3,436 
A.  Capital account 97 121 181 74 89 62  38 
Non-produced non-financial assets 97 121 181 74 89 62  38 
B.  Financial account -5,498 5,559 -7,990 -9,404 3,317 -1,010 -3,475
Banking sector -10,508 1,583 1,733 -986 -2,679 6,900 -1,649 
BCRA  -10,400 1,493 1,823 -1 ,404 -2,910 5,000 -2,000 
Other financial entities -108  90 -90 417 231 1,900 351 
Non-financial public sector 3,437 2,404  -517 -732 2,459 -2,336 -3,895 
National Government 2,957 2,158 -298 -632 736 -3,439 -4,113 
Local governments 809 448 -102 -65 1,784 1,163 253 
Firms and others -329 -202 -117 -35 -61 -61 -36 
Non-financial private sector 1,573 1,572  -9,206 -7,685 3,536 -5,574 2,069 
                                                      
31 Online information from the IPGE.  Viewed at:  http://www.indec.gov.ar/nuevaweb/cuadros/10/ipim-
anuario05.xls. Argentina WT/TPR/S/277/Rev.1 
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   2006 2007 2008 2009 2010 2011 2012 
III.  Net errors and omissions 1,163 63 1,062 -319 -608 -3,592 - 347 
IV.  Variation in international reserves 3,530 13,098 9 1,346 4,157 -6,108 -3,305
International reserves of the BCRA 3,960  14,139 210 1,582 4, 222 -5,814 -3,086 
Adjustment by repo type 430 1,041 201 235 65 294 219 
Memorandum item        
Current account (% GDP) 3.6 2.8 2.1 3.6 0.4 0.4 0.1 
Note: In the second quarter of 2010, estimations were included of  flows generated by the completion of the public debt swap 
undertaken in June 2010 (Decree No. 563/10).  Th e most important effects are seen in the financial account.  An estimate is als o 
included of the payment of interest capita lization and issuance of the 2017 Global Bond. 
Source: INDEC, BCRA. 
36. Argentina's services balance in remains in deficit;  and the shortfall doubled between 2010 
and 2012 to reach US$3,460 million, largely owing to increased outgoings in respect of transport, 
travel, business, professional and technical services,  and royalties (see below).  The income account 
was also in deficit during the review period, with the gap widening from US$6,090 million in 2006 
to US$11,307 million in 2012. 
37. Although the financial account recorded a surplus in 2007 and 2010, it was in deficit in 
the other years.  This gap was largest in 2008 and 2009, when, owing to the uncertainty caused by the 
global financial crisis, nearly US $17 billion of private capital flow ed out of the country, with a 
consequent increase in the net formation of fo reign assets by the non-financial private sector.  
Although this flow was reversed in 2010 with a net inflow of private capital, in 2011 there was 
another large net exodus of US$5,574  million, equivalent to 1.2% of GDP.  In 2010, there was also a 
net reduction in the foreign liabilities of the non-fi nancial public sector, reflecting the Government's 
debt reduction policy and the transfer of BCRA reserves to the Treasury, through the creation of 
the Argentine Debt Relief Fund (see below).  Th e net outflow of private capital together with 
the National Government's debt re duction policy resulted in a drain on  international reserves, unlike 
what happened in the 2006-2010 period, when ther e was vigorous accumulation.  The level of gross 
international reserves fell to US$46, 376 million by the end of 2011, before starting to pick up in the 
first quarter of 2012, when it reached US$47,291 m illion, but fell once again in the fourth quarter, 
ending the year 2012 at a lower level. 
38. Argentina's total foreign debt contracted  sharply in the review period, shrinking 
from 66.7% of GDP in 2005 to 31.6% in 2011.  The Argentine Debt Relief Fund, created 
by Decree No. 298 of 1 March 2010, aims to reduce the financial cost through savings on interest 
payments.  The Fund consists of part of the transfer of freely disposable BCRA reserves to the National Treasury.  In return, the BCRA receives a debt instrument issued by 
the National Treasury, consisting of a non-transferab le ten-year bill denominated in US dollars, 
with full amortization on expiry.  This pays an in terest rate equal to that earned by the BCRA's 
international reserves for the same period, and up  to a maximum equivalent to the one-year LIBOR 
rate less one percentage point.  Inte rest is calculated every six months. 
39. Decree No. 298/2010 provided for US$4,382 million of the BCRA's freely disposable 
reserves to be transferred to the National Treasury in  2010, in order to repay the latter's public debt 
held by the private sector, expiring in that year.  Decree No. 2054 of 22 December 2010 provided for 
the Fund's continuation in fiscal 2011, with a maximum amount of US$7,504 million.  
MEFP Resolution 131/2012 of 24 April 2012 provid ed for a National Treasury Bill to be issued 
in 2012, amounting to US$5,674 million, corresponding to payments to the private holders of public 
debt expiring in that year.  These payments, plus the cancellation of the debt with the IMF 
(US$9,530 million in 2006) a nd debt service payments to international organizations WT/TPR/S/277/Rev.1 Trade Policy Review 
Page 14 
  
  (US$2,134 million in 2010, US$2,0 79 million dollars in 2011 and US $2,083 million in 2012), make a 
total of US$33,382 million in international reserves used to pay the foreign liabilities of the public 
sector.  As a result of this policy, Argentina's to tal public debt was reduced from 73.5% of GDP in 
late 2005 to 41.8% in December 2011, while the external public debt was reduced from 35.9% 
of GDP to 16.4% in the same period. 
(3) TRADE AND INVESTMENT FLOWS  
(i) Trend of merchandise trade 
40. Following a period of rapid growth betw een 2006 and 2008, Argentine goods exports 
weakened in 2009 in the wake of the global cris is, before staging a recovery in 2010 and 2011.  
Between 2006 and 2011, goods exports grew by an av erage of 12.5% per year, to reach a level 
of US$83,950 million in 2011 (COMTRADE database, Tables AI.5 and AI.7).  Imports grew even 
faster, at an average annual rate of 16.7% (Tables AI.6 and AI.8).  Although both exports and imports 
expanded, the GDP share of merchandise trade sh rank between 2006 and 2011, from 38.1% to 35.5%.  
This partly reflects foreign-exchange factors and the robust growth of the domestic component 
of GDP. 
41. This export growth partly reflects an improveme nt in Argentina's terms of trade, involving 
increases in the prices of some of its main expor t products, supported by robust international demand 
for food and commodity products.  In contrast, the import growth reflects burgeoning domestic 
demand, for both consumer and capital goods. 
(a) Composition of merchandise trade 
42. Argentina remains a major exporter of agricultu ral products, which are still its leading export 
item, accounting for 53.9% of the total in 2011.  Oi lseeds, soya beans, wheat, maize and beef are the 
main export products (Table AI.5).  Fuel exports d ecreased, both as a share of the total and in absolute 
terms, from 15.3% of total exports (a bout US$7,121 million) in 2006 to 5.9% 
(around US$4,950 million) in 2011. 
43. The share of manufactured goods in total e xports, excluding those of agricultural origin, 
remain broadly unchanged at 31.4% in 2011 (Table  AI.5 and Chart I.1), while foreign sales of 
chemical and automotive products trende d positively during the period 2006-2011. 
44. The composition of Argentina's imports in 2006-2011 shows an increasing share of 
commodities, particularly fuels, which grew from 4.7% of total imports in 2006 to 12.2% in 2011 (Chart I.1).  In value terms, fuel imports incr eased more than fivefold, from roughly US$1,605 million 
in 2006 to around US$9,020 million in 2011 (Table AI.6 ).  In the latter year, manufactured products 
accounted for 79.9% of total imports, compared to 86.6% in 2006 (Chart I.1). 
(b) Merchandise trade destinations 
45. Despite continuously losing share during the period under review, the countries of 
the American continent remain th e leading destination for Argentine exports, accounting for 48.6% of 
the total exported in 2011 (Table AI.7 and Chart I.2) .  The share of the American continent decreased 
mainly owing to a reduction in Argentine exports  to the United States and Chile, while exports 
to Brazil increased.  After Brazil and the European Union (treated as a group), the main destinations 
for Argentine exports were China, Ch ile and the United States.  Asia's  share continued to rise, largely Argentina WT/TPR/S/277/Rev.1 
 Page 15 
 
 
  as a result of increased Argentine exports to China,  which has become its largest export market on 
the Asian continent. 
46. The proportion of imports sourced from the American continent decreased from 57% of the 
total in 2006 to 51.1% in 2011 (Table AI.8 and Char t I.2).  Imports from Brazil fell from 34.8% of the 
total in 2006 to 29.7% in 2011, partly as a r esult of the appreciation of the real against 
the Argentine peso for most of the period unde r review.  The share of imports obtained from 
the United States and the European Union also  declined, whereas tho se from China increased 
substantially from 9.1% of the total in 2006 to 14.3% in 2011. WT/TPR/S/277/Rev.1 Trade Policy Review 
Page 16 
  
  Chart I.1
Trade in goods by product, 2006 and 2011
2006 2011
(a)    Ex ports (f.o.b. )
Total: US$46,546  million
(b)    Imports (c.i.f.)
Manufacturers
Total: US$34,154 million Total: US$73,937 million
Source: COMTRADE database of the United Nations Statistics Division and Argentine authorities.Total: US$83,950 millionFuels
15.3%Other agricultural 
products
1.3%Other 
manufacturers
5.9%
Machinery
12.8%Other
2.9%
Agricultural 
products
Chemical 
products
18.8%Other mining 
products
3.9%Fuels
4.7%Food 
products
2.6%
Ag. 
products
ManufacturersMiningAg. 
productsMiningFood products
44.6%
Manufacturers Manufacturers
Chemical 
products
8.1%
Other 
mining 
products
4.2%Other semi-
manuf.
4.9%Food products
52.7%
Fuels
5.9%Other agricultural 
products
1.2%Other 
mining 
products
3.8%Chemical 
products
8.9%Other semi-
manuf.
3.2%Machinery
15.9%Other 
manufacturers
3.5%Other
4.9%
Agricultural 
products
Other 
agricultural 
products
1.5%
Other semi-
manufacturers
7.3%Machinery
48.2%Other 
manufacturers
12.3%Food 
products
2.4%Other 
agricultural 
products
1.1%
Fuels
12.2%
Other mining 
products
3.5%
Chemical 
products
16.8%
Other semi-
manufacturers
6.4%Machinery
45.4%Other 
manufacturers
11.3%Mining Mining
Other
0.8%Other
0.9%
 Argentina WT/TPR/S/277/Rev.1 
 Page 17 
 
 
  Chart I.2
Merchandise trade by trading partner, 2006 and 2011
2006 2011
(a)    Exports (f.o.b.)
Total: US$46,546 million
(b)    Im ports (c.i.f.)
Total: US$34,154 million Total: US$73,937 million
Source: COMTRADE database of the United Nations Statistics Division and Argentine authorities.Total: US$83,950 millionChile
9.5%Other
6.2%United States
8.8%
Canada
2.8%
Other America
15.4%Other Europe
1.8%
Mexico
3.3%China
7.5%Other Asia
7.8%
AmericaUnited States
5.1%
Japan
0.9%
EU(27)
17.5% Other America
14.2%China
7.4%Japan
1.0%
Other Europe
1.5%Other Asia
9.8%Other
7.2%
EuropeAsia
America
EuropeAsia
United States
12.6%
Other America
6.4%EU(27)
17.1%Other
Europe
1.0%Japan
2.7%
China
9.1%Other Asia
6.7%Other
6.2% United States
10.5%
Trinidad 
and Tobago
1.7%Brazil
29.7%
Other 
America
5.8%EU(27)
15.7%Other Europe
1.2%
Mexico
3.4%China
14.3%Other Asia
6.9%Other
8.9%
America America
Europe
EuropeAsia
AsiaEU(27)
16.9%Canada
0.9%
Japan
1.9%Chile
5.8%
Brazil
34.8%Brazil
20.7% Brazil
17.5%
Africa
6.3%
Africa
7.6%
 WT/TPR/S/277/Rev.1 Trade Policy Review 
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  (ii) Trade in services 
47. Argentina's trade in services recorded a wide ning deficit during the review period, doubling 
between 2010 and 2011 to US$2,238 million and r eaching US$3,460 million in 2012.  Although 
inflows grew by an average of 11.3% per year  between 2006 and 2012, outgoings averaged 14% per 
year, doubling in dollar terms between 2006 and 2012 (Table I.7). 
Table I.7 
Trade in services, 2006-2012  
(US$ million) 
 2006 2007 2008 2009 2010 2011 2012 
Balance -501 -513 -1,284 -1,285 -1,160 -2,238 -3,460 
Total inflows 8,023 10,363 12,156 10,967 13,648 15,606 15,239
Transport 1,408 1,666 1,771 1,575 2,034 2,210 2,347 
Freight 241 293 272 284 430 481 471 
Fares 555 670 650 516 687 706 773 
Other 612 703 849 775 918 1,023 1,103 
Travel 3,344 4,314 4,646 3,960 4,942 5,354 4,895 
Communication services 273 314 363 281 299 275 235 
Construction services 20 38 30 18 65 47 42 
Insurance services a 0 0 12 11 16 21 18 
Financial services 6 9 8 6 7 9 9 
Computer and information services 378 655 894 1,054 1,338 1,790 1,826 
Royalties 71 106 105  102 145 174 164 
Business, professional and technical 
services 2,140 2,816 3,690 3,547 4,297 5,178 5,168 
Personal, cultural and recreational 
services 258 314 486 280 320 345 335 
Government services n.e.s. 124 130 151 136 186 201 201 
Total outflows 8,523 10,876 13,440 12,252 14,808 17,844 18,699
Transport 2,278 2,997 3,911 2,692 3,700 4,535 4,650 
Freight 1,196 1,713 2,325 1,250 2,009 2,430 2,184 
Fares 939 1,142 1,401 1,272 1,497 1,923 2,303 
Other 143 142 185 171 194 182 163 
Travel 3,099 3,921 4,561 4,494 4,878 5,542 5,879 
Communication services 309 362 438 366 395 459 443 
Construction services 1 17 28 17 4 17 11 
Insurance services 283 375 449 442 541 719 408 
Financial services 78 87 84 94 105 89 80 
Computer and information services 226 310 378 427 461 591 718 
Royalties 806 1,042  1,463 1,461 1, 610 1,919  2,186 
Business, professional and technical 
services 990 1,250 1,512 1,605 2,377 3,161 3.425 
Personal, cultural and recreational 
services 172 208 249 288 381 460 480 
Government services n.e.s. 281 307 367 365 356 352 419 
a Zero represents an amount below US$500,000. 
Source:  INEC. 
48. Argentina has a deficit in almost all branches of its trade in services, with the exception of 
construction and computer and information services, which have been surplus throughout the period, 
and travel, where surpluses and deficits alternate.  Travel and transport are the most important items on both sides of the equation, representing about 60%  of outflows and more than 50% of inflows. Argentina WT/TPR/S/277/Rev.1 
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  (iii) Foreign investment 
49. Argentina continues to be a net recipient of foreign direct investment (FDI).  Between 2006 
and 2010, its stock of FDI grew by about US$19 billion, with inflows of around US$40 billion in the same period.  The FDI stock totalled US$88,249 milli on in 2010, the last year for which there was 
complete information as of late 2012.  The leading in vestors in Argentina are (in order of importance):  
Spain, the United States, the Netherlands, Chile , Brazil, Germany and Switzerland (Table I.8). 
Table I.8 
Foreign investment by investor, 2006-2010 
(US$ million) 
 2006 2007 2008 2009 2010 
Total 69,292 77,899 80,942 80,144 88,249 
Europe 40,408 45,159 45,070 44,963 47,605 
Spain 21,107 23,089 23,074 22,597 23,242 
Netherlands 8,921 9,916 10,230 10,375 11,055 
Germany 1,706 2,148 2,423 2,586 2,940 
Switzerland 1,408 1,944 2,100 2,293 2,900 
France 2,300 2,707 2,483 2,428 2,560 
United Kingdom 1,496 1,456 1,594 1,502 1,494 
Other 3,469 3,899 3,166 3,184 3,413 
North America 14,364 16,652 17,505 17,852 18,740 
United States 12,208 13,601 13,930 14,012 14,814 
Other 2,156 3,051 3,575 3,840 3,925 
Central America and Caribbean 5,647 5,358 5,242 4,046 5,401 
South America 7,848 9,469 11,752 11,664 14,252 
Chile 3,073 3,625 4,178 4,363 5,509 
Brazil 2,810 3,659 4,969 4,319 5,367 
Other 1,965 2,186 2,605 2,982 3,376 
Other regions 1,025 1,261 1,372 1,619 2,252 
Source:  Data provided by the Argentine authorities. 
50. During the period under review, the manufacturi ng sector absorbed the largest proportion of 
net FDI flows, led by the food products subsector , and the automotive and chemical industries.  
There were also major FDI flows in the mining and construction sectors, and in some service activities, such as transport, telecommunications and financial services.  FDI flows to Argentina 
retreated in 2009 in the wake of the global financia l crisis, but recovered af terwards.  Of the total 
FDI stock in Argentina, the oil industry accounted  for 20.6% in 2010, while manufacturing industry 
represented one third, of which almost 30% is investment in the chemical industry (Table I.9). 
Table I.9 
Foreign investment by activity, 2006-2010 
(US$ million) 
 2006 2007 2008 2009 2010 
Petroleum 18,482 20,596 18,885  17,706  18,220  
Mining 2,759 3,001  3,420  3,520  4,940  
Manufacturing industry 21,634 24,608 27,658 26,068 29,537 
Food, beverages and tobacco 3, 467  3,761  4,252  4,393  4,847  
Textiles and tanned leathe r 574  670  812  779  831  
Paper 1,029  1,114  1,088  977  1,059  
Chemicals, rubber and plastics 6,584  7,363  7,714  7,804  8,476  
Metals and metal articles 3,692  4,038  4,803  4,537  4,847  
Machinery and equipment 1,439  1,825  2,047  1,915  2,760  
Automotive industry 4,059  4,909  6,046  4,769  5,692  
Other 789  929  896  895  1,025  WT/TPR/S/277/Rev.1 Trade Policy Review 
Page 20 
  
   2006 2007 2008 2009 2010 
Electricity, gas and water 5,016  4,997  4,067  3,802  3,669  
Commerce 2,710  3,169  3,543  3,588  4,074  
Transport and communications 5,721  6,338  6,802  6,447  7,071  
Construction 846  980  1,180  1,365  1,534  
Private financial sector 2,759  3,087  3,391  3,970  4,206  
Other 9,364  11,122  11,995  13,678  14,997  
Total 69,292  77,899  80,942  80,144  88,249 
Financial sector 2,723 3,087 3,390 3,968 4,204 
Non-financial sector 66,569 74,812 77,551 76,175 84,044 
Debt vis-à-vis related enterprise s 16,312 17,789 21,480 20,289 22,611 
Capital 50,256 57,023 56,071 55,886 61,433 
Foreign investment flows 7,394 7,883 10,860 3,475 10,391 
Source: BCRA. 
(4) OUTLOOK  
51. In the context of the 2012 budget, the MEFP forecast real GDP growth at 5.1% in 2012 and 
4.6% in 2013, driven by vigorous domestic demand, particularly investment.  However, GDP grew by 
only 1.9% in 2012.  The MEFP is expecti ng a CPI rise of around 9% for both years.32 
52. According to the Market Expectations Survey  (REM) conducted by the BCRA, real GDP is 
expected to grow by about 3% in 2012 and 4% in 2013 (Table I.10).33  A steady depreciation of the 
nominal exchange rate and a gradual reduction in th e trade surplus are also expected, as goods imports 
outpace exports.  The REM sees the CPI rising by  between 10.4% (median forecast) and 13.7% 
(mean estimate) in 2012, and yet higher in 2013.34  There are also expectations of a slight increase in 
the balance-of-payments current account surplus in  2013, as well as in the primary surplus of the 
non-financial public sector. 
                                                      
32 MEFP (2012a). 
33 Through the REM, the BCRA compiles the main short- and medium-term macroeconomic forecasts 
regularly made by local and international economists a nd analysts.  Participation in the REM is voluntary and 
open to all institutions that provide estimates on a regular basis and have recognized experience in monitoring 
local economic conditions.  The methodology used to prepare the REM has been explained by the BCRA (2007). 
34 Online information from the BCRA, Relevamiento de Expectativas de Mercado (REM), 
agosto de 2012 .  Viewed at:  http://www.bcra.gov.ar/estadis/es070100.asp. Argentina WT/TPR/S/277/Rev.1 
 Page 21 
 
 
  Table I.10 
Projections of the main macroeconomic variables, 2012 and 2013 
Variables 2012 2013 
REM 
mean REM 
median MEFP REM 
mean REM 
median MEFP 
GDP at constant prices, year-on-year variation (%)  2.6 3.1 5.1 3.9 4.0 4.6 
Total consumption at constant prices, year-on-year 
variation (%)  3.6 3.7 4.7 4.4 4.4 4.1 
Gross fixed domestic investment at constant prices;  
year-on-year variation (%)  1.7 1.7 7.9 5.8 5.1 6.2 
Unemployment rate (%)  7.3 7.3  7.1 7.0  
CPI, annual rate of change (December-D ecember) (%)  13.5 10.2 9.4 14.8 11.8 8.6 
General wage index:  monthly variati on (%)  24.63 24.00 .. 21.85 20.00 .. 
Interest rate, 30-day fixed term in Ar g$ (%)  13.35 13.50 .. 14.41 15.00 .. 
Interest rate, LEBAC 1-year in Arg$ (%) 14.68 14.50 .. 15.71 16.00 .. 
Interest rate, reverse repos in Arg$, 7-day maturity (%)  10.12 9.50 .. 10.08 10.00 .. 
Interest rate, BADLAR average monthly rate of private 
banks, 30-day maturity in Arg$ (%) 14.87 15.00 .. 15.76 15.70 .. 
Nominal exchange rate (Arg$/US$) 4,8598 4,8678 4.40 5,6338 5,6490 4.69 
Exports in US$ million 85,299 84, 452 90,833 89,865 90,000 97,914 
Imports in US$ million 74,835 72, 770 82,254 79,718  79,348 91,049 
Balance of payments current account (US$  million) 791 1,000 .. 1,531 1,574 .. 
International reserves:  end of period (U S$ million) 46,043 46,300  .. 47,939 47,000 .. 
Primary balance of the na tional non-financial public 
sector (% GDP) -0.2 1.4 2.5 0.0 2.8 2.7 
.. Not available. 
Source : Online information from the BCRA, REM:  septiembre de 2012 .  Viewed at:  http://www.bcra.gov.ar/ 
estadis/es070100.asp, and Ministry of th e Economy and Public Finance (2012), 2012:  Presupuesto.  Resumen . 
Viewed at:  http://www.mecon.gov.ar /onp/html/pre supresumen/resum12.pdf. 
 
53. The IMF, for its part, is forecasting GDP growth of 2% in 2012 and 2.8% in 2013, 
and foresees consumer prices rising by1 0% in 2012 and by  9.9% in 2013.35 
                                                      
35 Online information from the IMF.  Viewed at:  http://www.imf.org/extern al/country/ARG/index.htm.