Economy of Argentina

Argentina has the second-largest economy in South America, trailing only Brazil. The United Nations classifies it as "very high" on the Human Development Index, a ranking supported by widespread literacy, an agricultural sector focused on exports, and a varied industrial base. Under President Javier Milei, the nation operates as a free-market capitalist economy, though this has not always been the case throughout its history.

The country possesses abundant natural resources, but its economic performance has been marked by instability. Periods of rapid growth have alternated with recessions, particularly since the late 1900s, which has worsened income inequality and poverty. At the start of that century, Argentina’s per capita GDP was among the top ten globally, on par with Canada and Australia and higher than France and Italy. In 2018, the Argentine peso lost roughly half its value due to hyperinflation, dropping from about 18–20 to over 38 per U.S. dollar, which led to a standby agreement with the IMF. The peso then fell another 25% in 2019, 90% in 2020, 68% in 2021, 50% in 2022, 54% in 2023, and 30% in 2024, before rising in 2025. In 2018, the FTSE Global Equity Index listed Argentina as an emerging market and a G20 member. Following prolonged capital controls, MSCI reclassified the country as a standalone market in 2021.

From 1946 until the 1976 military coup, a distinct left-wing populist ideology called Peronism dominated Argentina. President Jorge Rafael Videla and Economy Minister Martínez de Hoz largely reversed Peronism, adopting free-market and deregulatory policies such as ending price controls and foreign exchange restrictions. This approach continued from the junta into the subsequent Argentine Republic and was reinforced by the libertarian president Javier Milei, whose economic reforms aim to reduce the state’s role in the economy and its debt.

**History**

Argentina’s economy has shifted from being one of the world’s wealthiest in the early 1900s to experiencing repeated cycles of boom, bust, and hyperinflation, driven by reliance on commodities, political instability, and policy changes. The following timeline summarizes this history, with updates to 2025 reflecting recent reforms under Milei.

**Pre-20th Century Foundations (Before 1880s)** Before the 1880s, the economy depended on exports of salted meat, wool, leather, and hides, with little industrialization.

**Golden Age (1880–1905)** Argentina was among the world’s richest nations. In 1913, it was wealthier than France or Germany, nearly twice as prosperous as Spain, and its per capita GDP was almost as high as Canada’s. From 1880 to 1905, British and French investments fueled livestock and grain exports, sparking rapid growth and mass European immigration. GDP expanded 7.5 times (an average of 8% annually), and per capita GDP rose from 35% to 80% of the U.S. level. A 2009 study noted GDP gains after 1870 but stagnant heights (a proxy for welfare) until 1910, indicating uneven benefits. Growth slowed from 1905 to 1941, though per capita GDP reached about 50% of U.S. levels by 1941, matching Western Europe but with inequality.

**Great Depression (1929–1932)** The Great Depression severely shrank the Argentine economy by sharply reducing foreign trade, prompting a shift away from reliance on agricultural exports. In response, successive governments pursued import substitution industrialization, raising tariffs to protect domestic manufacturers. The 1933 Roca–Runciman Treaty, which secured Argentine beef access to British markets after the Ottawa Conference, was widely criticized by nationalists as an unequal concession to British commercial interests.

**Perón Era (1945–1955)** Juan Perón nationalized the Central Bank, railways, and industries. Inflation averaged 26% annually from 1944 to 1974. GDP per capita peaked in the early 1950s but stagnated due to commodity slumps and nationalizations. Argentine industry benefited as European countries could not supply global markets. Industrial goods were exported in large volumes, mainly to Latin America and the Caribbean. Policies included rediscounts, the Export and Industrial and Commercial Stimulus Committee, industrial promotion laws, creation of a state merchant fleet, credits from the Banco Industrial (1944), and nationalization of the Central Bank in 1946. Following Keynesian ideas, Perón aimed to establish a welfare state by increasing social security and improving income distribution through higher public spending and simultaneous investments in defense, health, education, and housing. Production grew, and rising exports fueled consumption.

**Debt Crisis and Hyperinflation (1976–1990s)** From 1976 to 1983, the National Reorganization Process pursued neoliberal policies under José Alfredo Martínez de Hoz, which ballooned debt. Inflation hit 344% in 1983, the currency devalued tenfold, and growth stalled. Stagflation from 1975 to 1990 was driven by rising debt, tax evasion, and capital flight, with hyperinflation peaking in 1989–1990. In 1991, under Domingo Cavallo, the government attempted reforms by pegging the peso to the dollar. With the money supply constrained, inflation fell to single digits. Liberalization and privatization boosted GDP by 33% in four years. Erratic growth followed after 1995. In 2001, a crisis shrank GDP by 20%, unemployment reached 25%, and the peso declined by 70%.

**Commodity Boom and Kirchner Recovery (2002–2015)** From 2003 to 2011, expansionary policies and increased exports created over 5 million jobs. GDP nearly doubled (averaging 7.1% annually, with 9% growth from 2003 to 2007). Real wages rose 72% from 2003 to 2013. The postal service, water utilities, pensions, Aerolíneas Argentinas, YPF, and railways were renationalized. A crisis halted growth in 2009, though it rebounded to 9% in 2010–2011. From 2012 to 2015, capital controls, austerity, inflation, and trade slumps cut growth.