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    Argentina Economy 2000

      Economy - overview: Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. However, when President Carlos MENEM took office in 1989, the country had piled up huge external debts, inflation had reached 200% per month, and output was plummeting. To combat the economic crisis, the government embarked on a path of trade liberalization, deregulation, and privatization. In 1991, it implemented radical monetary reforms which pegged the peso to the US dollar and limited the growth in the monetary base by law to the growth in reserves. Inflation fell sharply in subsequent years. In 1995, the Mexican peso crisis produced capital flight, the loss of banking system deposits, and a severe, but short-lived, recession; a series of reforms to bolster the domestic banking system followed. Real GDP growth recovered strongly, reaching 8% in 1997. In 1998, international financial turmoil caused by Russia's problems and increasing investor anxiety over Brazil produced the highest domestic interest rates in more than three years, halving the growth rate of the economy. Conditions worsened in 1999 with GDP falling by 3%. President Fernando DE LA RUA, who took office in December 1999, sponsored tax increases and spending cuts to reduce the deficit, which had ballooned to 2.5% of GDP in 1999. The new government also arranged a new $7.4 billion stand-by facility with the IMF for contingency purposes - almost three times the size of the previous arrangement. Key challenges facing the new government include reforming the country's rigid labor code and addressing the precarious financial situation of several highly indebted provinces.

      GDP: purchasing power parity - $367 billion (1999 est.)

      GDP - real growth rate: -3% (1999 est.)

      GDP - per capita: purchasing power parity - $10,000 (1999 est.)

      GDP - composition by sector:
      agriculture: 7%
      industry: 29%
      services: 64% (1999 est.)

      Population below poverty line: 36% (1998 est.)

      Household income or consumption by percentage share:
      lowest 10%: NA%
      highest 10%: NA%

      Inflation rate (consumer prices): -2% (1999 est.)

      Labor force: 15 million (1999)

      Labor force - by occupation: agriculture NA%, industry NA%, services NA%

      Unemployment rate: 14% (December 1999)

      Budget:
      revenues: $44 billion
      expenditures: $48 billion, including capital expenditures of $NA billion (2000 est.)

      Industries: food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel

      Industrial production growth rate: -7% (1999 est.)

      Electricity - production: 75.237 billion kWh (1998)

      Electricity - production by source:
      fossil fuel: 42.71%
      hydro: 47.55%
      nuclear: 9.47%
      other: 0.27% (1998)

      Electricity - consumption: 75.57 billion kWh (1998)

      Electricity - exports: 250 million kWh (1998)

      Electricity - imports: 5.85 billion kWh (1998)

      Agriculture - products: sunflower seeds, lemons, soybeans, grapes, corn, tobacco, peanuts, tea, wheat; livestock

      Exports: $23 billion (f.o.b., 1999 est.)

      Exports - commodities: edible oils, fuels and energy, cereals, feed, motor vehicles

      Exports - partners: Brazil 24%, EU 21%, US 11% (1999 est.)

      Imports: $25 billion (c.i.f., 1999 est.)

      Imports - commodities: machinery and equipment, motor vehicles, chemicals, metal manufactures, plastics

      Imports - partners: EU 28%, US 22%, Brazil 21% (1999 est.)

      Debt - external: $149 billion (1999 est.)

      Economic aid - recipient: $2.833 billion (1995)

      Currency: 1 peso = 100 centavos

      Exchange rates: peso is pegged to the US dollar at an exchange rate of 1 peso = $1

      Fiscal year: calendar year

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