Argentina's economy rebounds by 10.3% last year - highest growth rate since 1964

Argentina's INDEC statistics bureau reported that the nation's economy grew by 10.3% in 2021 - a sharp rebound from a 9.9% fall in 2020, and the highest annual figure since 1964.

The nation's economy, the third-largest in Latin America, grew 0.9% in December and 9.8% from a year earlier - putting GDP up 4.9% on pre-pandemic levels (February 2020).

Argentine GDP, however, remained 2.8% below February 2018 levels - before a foreign debt bubble under former President Mauricio Macri burst, leading to a two-year "Macrisis."

Outperforming projections

World Bank Managing Director of Operations Axel van Trotsenburg congratulated Economy Minister Martín Guzmán for Argentina's recovery - which outperformed initial projections of around 4.5% growth.

Growth in 2021 was led by recreational and other services (29.3%) and construction (27.5%) - two of the hardest-hit sectors by crowding restrictions in effect during much of 2020.

Strong growth was also seen in tourism (21.5%), fisheries (16.7%), and manufacturing (15.7%) - with factories now running at their best rate since 2017.

Fixed investment in 2021 rose by 22.2% according to Orlando Ferreres, a top local macroeconomy consultant - to its highest level since 2018.

The recovery stoked already high inflation, with consumer prices up 51%. Real wages, however, edged up 1.7% - after a 5-year decline of 22% - and unemployment eased to 7.9%, from 11.4% a year earlier.

Exports jumped by 42% to $78 billion last year, on both higher quantities (up 13%) and prices. And while the recovery fueled a 49% higher import bill (on 30% higher volume), the nation's critical trade surplus rose to $14.75 billion.

Macri-era debt looms large

Central Bank reserves did not recover, however, as much of the trade surplus is now needed to service Argentina's $190 billion public foreign debt, which had doubled during the 2015-19 Macri administration.

This includes $40 billion still owed to the IMF on a record, $45 billion bailout granted to Macri ahead of his failed, 2019 campaign - a bailout reportedly granted at the insistence of former President Donald Trump.

Argentina and the IMF last month came to a preliminary agreement on refinancing the debt - some 28% of the IMF's outstanding loans, and the largest by far.

The agreement, which still requires Argentine congressional and IMF board approval, was lauded by economist Joseph Stiglitz as "not insisting, as (the IMF) usually does, on austerity - instead providing Argentina with room to continue its economic recovery."

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Opening soon: The New Brighton Bar in downtown Buenos Aires announces its reopening in November after closing in March 2020, early in the ongoing pandemic.

The café - once visited by the Prince of Wales in 1925 - is one of numerous such establishments reopened during the past few months in Buenos Aires and other Argentine cities.