General
|
|
Recent Struggles and Turnaround
Due to corruption and a militant dictatorship under Jose Martinez in from 1976-1983 Argentina's economy tanked during the 90s and early 2000s. Inconsistent monetary policy after Martinez's regime led to a collapse of the economy in 2002. Argentina defaulted on its debt, GDP plummeted, unemployment reached 25%, and the peso was devalued by 70%. However, an increase in exports and a new expansionary policies beginning in 2003 helped Argentina rebound from the economics crisis. GDP has been rising exceptionally fast and in 2005 the nearly $100 billion of defaulted debt was restructured and payments began.
Downsides of Conducting Business in Argentina
- Corruption is still an issue. President Fernandez stated that the economy grew 8.3% during the second quarter of this year; however, third party consultants found the actual growth rate to be less than half of her claim
- Although they are making progress, Argentina's debt rating is CCC+
- Ranked 124th out 185 countries in "ease of business" by the World Bank
- Inflation is privately estimated to by nearly 30%
The Wine Industry
- 5th largest producer and the 8th largest consumer of wine in the world
- Devaluation of the peso led to decreased production costs and a significant increase in enotourism
- Over 60% of the 1500 vineyards in Argentina are located in the province of Mendoza
- Wine exports increased to 365 million liters in 2012 which is a five fold increase since 2000
- In 2012, wine and grape juice exports topped $1 billion