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Economy

Argentina is classified as a newly industrialized economy (NIC), a socioeconomic classification applied to countries whose economies have not yet reached first world status but have, in a macroeconomic sense, outpaced their developing counterparts. Other NICs include China, India and Brazil, which like Argentina, are currently undergoing rapid economic growth and social change. Argentina’s NIC classification is largely based on the following characteristics:

• Consistent, robust GDP growth of ~9% over the past five years
• Strong social freedoms and civil rights
• An industrial economy with a strong manufacturing sector
• An open-market economy, allowing free-trade with other nations
• Large national corporations operating multi-nationally
• Strong foreign capital investment

Argentina has undergone dramatic socioeconomic change in the past ten years, transforming from a country in economic crisis to one of the fastest growing nations in the world today. In 1998, Argentina was in a state of recession that ended with economic collapse in 2001. In 2002, Argentina defaulted on its debt, GDP sunk, unemployment surged to over 25% and its currency depreciated by 75% after being devaluated by over 30%. In 2003, Ernesto Kirchner took over the Presidency of Argentina and immediately made sweeping policy changes on import substitution and exports which very quickly resulted in dramatic surges in GDP. Kirchner’s policies created millions of jobs, encouraged internal consumption, attracted foreign investment and stimulated exports, creating a huge trade surplus. Since Kirchner took office, Argentina’s GDP has grown at a rapid pace of ~9% per annum, driven largely by manufacturing and oil and gas exports.