Updated July 15, 2019
Argentina: An Overview
Political and Economic Environment
projection for 2019 is a contraction of 1.2%, and for 2020 a
Current President Mauricio Macri—leader of the center-
growth rate of 2.2%. Inflation was almost 25% at the end of
right Republican Proposal and the Cambiemos (Let’s
2017, and rose to almost 48% at the end of 2018; it is
Change) coalition representing center-right and center-left
forecast to decline to almost 31% at the end of 2019.
parties—won the 2015 presidential election in a close race.
Macri defeated the candidate of the leftist faction (Front for
Argentina at a Glance
Victory, or FPV) of the Peronist party (officially known as
Population: 44.6 mil ion (2018, IMF est.).
the Justicialist Party) led by outgoing President Cristina
Fernández de Kirchner, who was ineligible to run for a third
Area: 1.1 mil ion square miles, about the size of the United
consecutive term. Macri’s election ended 12 years of FPV
States east of the Mississippi.
rule by the Kirchners (Néstor Kirchner, 2003-2007, and
GDP: $518 bil ion (2018, current prices, IMF est.).
Cristina Fernández, 2007-2015). The Kirchners’ rule helped
Real GDP Growth: 2.7% (2017, IMF est.); -2.5% (2018, IMF
Argentina emerge from a severe economic crisis in 2001-
est.).
2002 but was characterized by protectionist and unorthodox
Per Capita GDP: $11,627 (2018, current prices, IMF est.).
economic policies and increasing corruption.
Key Trading Partners (total trade): Brazil (21.1%), China
Figure 1. Map of Argentina
(12.8%), United States (9.3%) (2018, INDEC).
Legislature: Bicameral Congress, with 72-member Senate
and 257-member Chamber of Deputies.
Sources: International Monetary Fund (IMF) and National
Institute of Statistics and Census, (INDEC, Argentina).

As pressure on the peso increased in 2018, the government
turned to the IMF for support, which approved (and
subsequently revised) an agreement to provide $57 billion
in support through 2021. To date the IMF has conducted
four performance reviews of Argentina’s progress under the
program, with a total of $44.1 billion made available. In
July 2019, the IMF lauded Argentina for steadfast
implementation of its economic policy program, noting that
its policies are yielding results, with inflation expected to
fall in coming months.
October 2019 Presidential Race. Argentina’s economic

difficulties have taken a toll on President Macri’s popularity
Source: CRS.
and will be a factor in his bid for re-election. A first
presidential electoral round is scheduled for October 27,
President Macri moved swiftly to usher in economic policy
2019, along with elections for one-half of the Chamber of
changes. His government lifted currency controls; reduced
Deputies (the lower house of Argentina’s Congress) and
or eliminated agricultural export taxes; and reduced
one third of the Senate. In the presidential race, if no
electricity, water, and heating gas subsidies. The
candidate receives 45% of the vote, or 40% and finishing
government reached a deal with private creditors in 2016
10 percentage points ahead of the second place candidate,
that ended the country’s 15-year default, which allowed the
then a second round would be held in November.
government to repair its “rogue” debtor status and resume
borrowing in international capital markets. Although
Although nine political coalitions are currently vying for
adjustment measures contributed to almost 2.1% economic
the presidency, at this juncture the race is a competition
contraction in 2016, the economy grew by 2.7% in 2017,
between the center-right coalition of Macri and his Peronist
according to the International Monetary Fund (IMF).
vice presidential running mate, Miguel Ángel Pichetto,
(dubbed Juntos por el Cambio or Together for Change),
In early 2018, the IMF was forecasting almost 2% growth
versus the populist leftist Peronist ticket of Alberto
for the year, but Argentina’s economic difficulties,
Fernández (former cabinet chief to Néstor Kirchner) and
including a severe drought affecting agricultural exports,
former President Cristina Fernández de Kirchner for vice
thwarted those expectations. The economy ultimately
president (dubbed Frente de Todos or Front for All).
contracted 2.5% in 2018. Looking ahead, the IMF’s
Former President Fernández had been expected to run for
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Argentina: An Overview
president, but surprised many observers in May 2019 by
enforcement. In addition, Congress also provided $2.5
announcing she would instead run for vice president.
million in assistance for FY2018 (P.L. 115-141) and
Likewise, President Macri surprised observers when he
FY2019 (P.L. 116-6; H.Rept. 116-9) to support Argentina’s
chose a Peronist politician as his running mate in an attempt
counterterrorism, counternarcotics, and law enforcement
to divide the Peronist vote.
capabilities. For FY2019, the United States also is
providing $3 million in assistance to help with the influx of
Foreign Policy. In the foreign policy arena, the Macri
Venezuelan migrants. In addition to foreign aid,
government has improved relations with neighboring Brazil
Argentina’s status as a major non-NATO ally since 1998
and Uruguay and other pro-market countries in the region.
makes it eligible for preferential treatment for U.S. exports
In June 2019, the four countries of the South American
of excess defense articles.
customs union known as Mercosur (Mercado Común del
Sur)—Argentina, Brazil, Paraguay, and Uruguay—
Trade and Investment Issues. The United States ran a
concluded a free trade agreement with the European Union.
$5.1 billion trade surplus with Argentina in 2018, exporting
Some analysts maintain that that the ratification process
$9.9 billion in goods to the country (led by oil, machinery
will be complicated, which could delay implementation
and mechanical appliances, electrical machinery and
until 2021 at the earliest.
equipment, and soybeans) and importing $4.9 billion (led
by oil, aluminum, precious stones [silver and gold], and
President Macri has been strongly critical of the
wine). The stock of U.S. foreign direct investment in
antidemocratic actions of the Maduro regime in Venezuela.
Argentina was $14.9 billion in 2017, led by manufacturing,
He supported efforts at the Organization of American States
information services, and finance/insurance. Argentina has
to press Venezuela to change its behavior, and joined with
been on the U.S. Trade Representative’s Special 301
other regional countries in 2017 to form the Lima Group
Priority Watch List since 1996 due to problems with
seeking a democratic resolution. In January 2019,
intellectual property rights protection and enforcement.
Argentina recognized the head of Venezuela’s National
Assembly, Juan Guaidó, as the country’s interim president;
The United States and Argentina have made progress on
it has also supported U.S. economic sanctions. According
some trade issues. In 2018, Argentina gained access to the
to the United Nations, some 130,000 Venezuelans have
U.S. market for lemons and fresh beef, which it had sought
migrated to Argentina because of the crisis in Venezuela.
since 2001, and the United States gained access to the
U.S.-Argentine Relations
Argentine market for pork (the first access since 1992) and
full market access for beef and beef products banned for
U.S.-Argentine relations have been characterized by robust
more than a decade. Argentina was concerned about the
commercial linkages and cooperation on issues such as
potential imposition of U.S. duties on steel and aluminum
nonproliferation, human rights, education, and science and
imports in 2018, but it received a permanent exemption
technology. There were periodic tensions under the
after reaching a quota agreement with the United States.
Kirchner governments, but Macri’s election brought to
power a government committed to improving bilateral
The United States imposed countervailing and antidumping
relations. President Obama engaged the Macri government
duties on biodiesel imports from Argentina in 2018 because
on a range of bilateral, regional, and global issues, and he
of Argentina’s subsidies to its producers. In response to a
visited Argentina in 2016.
request from Argentina, the Commerce Department
initiated a review of the duties in November 2018, and in
Strong bilateral relations are continuing under the Trump
early July 2019 issued preliminary results that would
Administration. President Macri visited the White House in
significantly reduce the countervailing duties, but keep the
April 2017, and the two leaders underscored their
antidumping duties in place.
commitment to expand trade and investment and pledged
strengthened partnership to combat narcotics trafficking,
AMIA Bombing. Congress has expressed concern over the
money laundering, terrorist financing, and corruption, and
years about progress in bringing to justice those responsible
to increase engagement on cyber issues. In September 2018,
for the July 18, 1994 bombing of the Argentine-Israeli
President Trump reaffirmed strong U.S. support for
Mutual Association (AMIA) in Buenos Aires that killed 85
Argentina’s engagement with the IMF.
people. Both Iran and Hezbollah (the radical Lebanon-
based Islamic group with strong ties to Iran) are alleged to
President Trump met with President Macri in Argentina in
be linked to the attack as well as to the 1992 bombing of the
November 2018, on the sidelines of the G-20 summit,
Israeli Embassy that killed 29 people. As the 25th
which Argentina hosted. The two countries reached
anniversary of the AMIA bombing approaches, a bipartisan
bilateral agreements on educational exchange programs,
resolution introduced in the House, H.Res. 441, would
national park conservation efforts, health cooperation,
reiterate strong condemnation of the attack and express
aviation safety, and energy sector cooperation. The
strong support for accountability, including against those
Overseas Private Investment Cooperation signed letters of
Iranian and Hezbollah operatives deemed responsible. The
interest for $813 million in U.S. support for several projects
Macri government reportedly is considering whether to
involving infrastructure, energy, and logistics.
designate Hezbollah a terrorist organization.
U.S. Foreign Aid. Argentina traditionally has not received
much U.S. foreign assistance because of its relatively high
Also see CRS In Focus IF10991, Argentina’s Economic
per capita income. In recent years, the United States has
Crisis, by Rebecca M. Nelson.
provided relatively small amounts of assistance for military
education and training and for export-control security to
Mark P. Sullivan, Specialist in Latin American Affairs
enhance Argentina’s strategic trade control compliance and
IF10932
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Argentina: An Overview


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https://crsreports.congress.gov | IF10932 · VERSION 8 · UPDATED

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