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Argentina: Market Profile

Picture: Argentina factsheet
Picture: Argentina factsheet

1. Overview

Argentina, one of the largest economies in Latin America with vast natural resources in energy and agriculture, is a leading food producer with large-scale agricultural and livestock industries. The country also has significant opportunities in some manufacturing sub-sectors and innovative services in high-tech industries, helped further by the country's largely skilled workforce. Argentina served as the chair of G20 in 2018 and has since taken a very active role on the international stage as it became an observer in the Pacific Alliance and has expressed its intention to join the Organisation for Economic Co-operation and Development. However, we note that political and economic risks remain elevated amid high inflation and unemployment.

Sources: World Bank, Fitch Solutions

2. Major Economic/Political Events and Upcoming Elections

November 2015
Mauricio Macri, mayor of Buenos Aires, won the presidential election and took office in December.

February 2016
Argentina agreed to settle its multi-billion dollar debt with hedge funds in the United States over bond repayments, which had restricted the country's access to international credit markets.

October 2017
Macri's coalition won the parliamentary election.

May 2018
The government raised interest rates significantly in an effort to shore up the value of the peso.

June 2018
The government reached a USD50 billion stand-by arrangement with the IMF that would help cover external financing needs over the coming quarters.

June 2018
A trade deal was struck between Mercosur and the European Union (EU) allowing for the elimination of nearly all tariffs on two-way trade. The deal would provide preferential access for Argentine exporters to the huge European market, increasing its appeal as a location for investment by European companies. The deal would now have to be approved by the European Parliament before it can come into effect.

October 2018
The IMF completed its first review of Argentina's economic performance under the 36-month stand-by arrangement approved in June, which had since been renegotiated to USD56.3 billion (the largest credit line in IMF history) until 2021. The IMF approved of the budgetary steps being taken through the Argentine government's economic plan, which aims to achieve a primary fiscal surplus of 1% by 2020.

August 2019
Honda Motors announced that it would stop producing automobiles in Argentina next year as part of a global shift in how it shares production between regions. However, the company noted that its Campana plant in the province of Buenos Aires would shift its focus to motorcycles.

September 2019
The Argentinian government announced that it would restrict foreign currency purchases following a sharp drop in the value of the peso. Argentina is also seeking to defer debt payments to the International Monetary Fund (IMF) to deal with the crisis.

October 2019
Argentina’s Alberto Fernández won Argentina's presidency in the first round of the vote on October 27, securing 48.1% of the vote, defeating centre-right incumbent Mauricio Macri.

November 2019
The Government of Argentina, through a presidential decree, had approved a contract with Agence Française de Développement (AFD) to borrow USD40 million for the Comprehensive Management Plan for the Luján River Basin in Buenos Aires. The scheme aims to prevent floods by carrying out works in Chacabuco, Luján, Mercedes, San Andrés de Giles and Suipacha. The government also approved signing a USD75 million loan deal with the French lender to upgrade the Tapiales-Marinos section of the Line M of the Belgrano Sur railway. Work involves renewing and duplicating tracks, signalling, improving drainage and building a viaduct. The scheme, to be executed by the Ministry of Transportation, is due to be completed by the end of 2022.

Sources: BBC country profile – Timeline, World Bank, Fitch Solutions

3. Major Economic Indicators

Graph: Argentina real GDP and inflation
Graph: Argentina real GDP and inflation
Graph: Argentina GDP by sector (2018)
Graph: Argentina GDP by sector (2018)
Graph: Argentina unemployment rate
Graph: Argentina unemployment rate
Graph: Argentina current account balance
Graph: Argentina current account balance

f = forecast
Sources: IMF, Fitch Solutions, INDEC, World Bank
Date last reviewed: November 11, 2019

4. External Trade

4.1 Merchandise Trade

Graph: Argentina merchandise trade
Graph: Argentina merchandise trade

Source: WTO
Date last reviewed: November 11, 2019

Graph: Argentina major export commodities (2018)
Graph: Argentina major export commodities (2018)
Graph: Argentina major export markets (2018)
Graph: Argentina major export markets (2018)
Graph: Argentina major import commodities (2018)
Graph: Argentina major import commodities (2018)
Graph: Argentina major import markets (2018)
Graph: Argentina major import markets (2018)

Sources: Trade Map, Fitch Solutions
Date last reviewed: November 11, 2019

4.2 Trade in Services

Graph: Argentina trade in services
Graph: Argentina trade in services

Source: WTO
Date last reviewed: November 11, 2019

5. Trade Policies

  • Argentina has been a World Trade Organization (WTO) member since January 1, 1995 and a member of the General Agreement on Tariffs and Trade since October 11, 1967.

  • Argentina is a founding member of Mercosur (officially the Southern Common Market), a regional trade bloc established in 1991, alongside Brazil, Paraguay and Uruguay and seven other associate members. Membership of Mercosur offers exporters, importers, businesses and investors a uniform customs and tariff schedule, leading to an increase in the ease of sourcing capital and inputs in the region. Mercosur membership also provides Argentina with increased negotiating power on a global scale, as the group negotiates as a bloc and concludes trade agreements as a collective.

  • On January 1, 1995, Mercosur implemented the Common External Tariff (CET). Most imports from non-Mercosur members are then subject to CET, which ranges from 0% to 35%.

  • Argentina has adopted a July 2015 decision by the Common Market Council to extend the mechanism that allows Mercosur countries to have a national list of exceptions to the CET. In the case of Argentina, this exception will apply to up to 100 tariff lines through to December 31, 2021.

  • Apart from free trade agreements (FTAs) with a range of countries, including Bolivia, Chile, Colombia, Ecuador, Mexico and Peru under Mercosur, Argentina also provides certain duty breaks to members of the Latin American Integration Association for goods not covered under the aforementioned agreements.

  • The policies implemented by former president Cristina Fernández de Kirchner were aimed at promoting local production and reserving the benefits of natural resources for the domestic market. However, trade barriers are being gradually removed under the new administration. The lifting of capital controls and reduction of export taxes in December 2015 is making foreign currency more easily available and exporters face lower fiscal penalties. Businesses are able to freely access foreign currency on market terms, improving the ability to purchase imports and can transfer dollar-denominated profits abroad without restrictions.

  • The reforms implemented by the administration of President Mauricio Macri to reduce trade barriers and boost investor confidence will provide some tailwinds to trade growth over the medium term; however, Argentina remains among the most tariff-protected nations in Central and South America at an average tariff rate of 7.35% – the fifth highest in the region and above the regional and global averages of 4.71% and 5.47% respectively.

  • The government has significantly reduced some of the bureaucratic barriers and customs procedures associated with international trade. This has included abolishing the non-automatic import licensing system in December 2015, with only around 13.5% of tariff lines now requiring import licence approval. However, complicated customs procedures including proof of origin and reference pricing continue to pose a burden to businesses requiring timely delivery of intermediate inputs.

  • According to the Argentine Customs Code, importers and exporters must be listed in the registry of importers and exporters at Argentine customs (Dirección General de Aduanas). Argentina applies import duties and a range of indirect taxes on import and local transactions. Products imported for consumption are generally subject to import duties, statistical tax, value added tax (VAT), excise duties and anticipated profits tax. As a member of Mercosur, Argentina uses the Mercosur Common Nomenclature classification, which is consistent with the Harmonised System classification.

  • Argentina currently applies minimum specific import duties (DIEMs) on a range of imports from all destinations apart from Mercosur countries. DIEMs are applied only when the duty that results from their application is greater than that resulting from ad valorem tariffs. Products currently subject to DIEMs include textiles, apparel, footwear and certain toys.

  • Argentina has two types of import licences – automatic and non-automatic. On December 21, 2015, the Comprehensive Import Monitoring System (Sistema Integral de Monitoreo de Importaciones, SIMI) replaced the DJAI (Declaración Jurada Anticipada de Importación, or sworn advance import declaration) system for managing and processing import licences. The Argentine government is issuing automatic licences through SIMI for imports for consumption within Argentina of products under virtually all tariff lines. Non-automatic import licences are required for a range of goods because of their sensitive nature. These licences are typically issued within 10 days unless the application is incomplete, in which case authorities have up to 30 days to complete their review and make a decision. The government also recently increased the period of validity of non-automatic licences from 90 days to 180 days and amended the list of items subject to non-automatic licencing.

  • In November 2004, Argentina signed an agreement with Mainland China where it committed to grant market economy status to Mainland China for purposes of anti-dumping and countervailing duty investigations. For the first time in 2017, Argentine authorities decided to treat Mainland China as a market economy during the anti-dumping investigation of Mainland China's ceramic sanitary ware exports.

  • Argentine authorities implement, on an informal basis, a trade balancing or one-to-one matching requirement that, in many instances, requires importers to commit to export one dollar's worth of merchandise for every dollar's worth of merchandise they import into Argentina. Alternatively, they can invest in the country. However, there is no formal legislation in Argentina governing these practices.

  • In May 2018, Argentina implemented new digital import certificate procedures for motor vehicles, trailers, semi-trailers, engine blocks and self-propelled agricultural, road and industrial machinery that are expected to further facilitate the import process for these products. The digital certificates may be requested through the remote processing module and will be issued electronically by the relevant body within the National Automotive Property Registries and Collateral Loans Directorate.

  • Argentina has banned the sale, importation and use of the active principles dichlorvos (DDVP) and trichlorfon in grains, as well as any formulated products containing those active principles. The ban is expected to enter into force on November 4, 2018 and covers grain production as well as post-harvest, transportation, manipulation and storage activities.

  • In April 2018, Argentina issued an updated list of imported products subject to non-automatic licensing in order to correct certain inadvertent errors and further simplify and facilitate import operations. The updated list includes a broad range of products, such as textiles, apparel, footwear and various other consumer goods.

  • Export taxes mostly affect traders from Mainland China, Vietnam, Indonesia, Iran, the Philippines, the United States and the European Union. The impact of export taxes varies by industry. Most export taxes on agricultural products, minerals and manufactured goods were lifted by the new government in 2016. However, in September 2018 President Mauricio Macri announced an export tax of four pesos per dollar on exports of primary products, including agricultural goods (affecting soybean meal, soybean oil and corn) and three pesos per dollar on other exports.

Sources: WTO – Trade Policy Review, Fitch Solutions, Marval, O’Farrell & Mairal

6. Trade Agreement

6.1 Multinational Trade Agreements


  1. Mercosur: Established in 1991, Mercosur is a Regional Customs Union with Brazil, Argentina, Paraguay, Uruguay and Venezuela (the latter remained suspended as of 2019). The Mercosur agreement facilitates trade with these neighbouring countries through the removal of tariff and non-tariff barriers. The customs union is still in the process of being fully implemented, however, with some significant exceptions to the CET in individual countries and double application of import tariffs on goods imported to one member and consequently moved into another. Bolivia is in the process of becoming a full member. Mercosur encompasses approximately 75% of South America's GDP and is one of the world's largest economic blocs. Brazil is Argentina's largest source of goods and its largest export partner.

  2. Mercosur and associate members: The FTA between Mercosur and associate members (Chile, Peru, Colombia, Ecuador, Guyana and Suriname) facilitates regional trade and is especially beneficial for trade with Chile, one of Argentina's top trade partners. However, Mercosur's associate members do not enjoy full voting rights or complete access to markets.

  3. Mercosur-India Preferential Trade Agreement (PTA): The PTA between Mercosur and India entered into force on June 1, 2009. India is an important trade partner for Argentina and is listed as the country's seventh-biggest trading partner. India is expected to grow faster than the third-highest partner, Mainland China, over the medium term, creating even greater opportunities for Mercosur countries.

  4. Mercosur-Chile: The FTA entered into force on March 10, 2017. Chile is a significant trade partner and this agreement consequently facilitates trade flows between the two countries. Chile is a net importer of Argentine goods and services. Chile imports a diverse range of goods from Argentina, including chemical products, agricultural goods, transportation, minerals and plastic and rubber products.

  5. Mercosur-Israel: In December 2007, after almost two years of negotiations, Mercosur member states and Israel signed an agreement that establishes a free trade area. This agreement reduces barriers to foster trade, but the impact is limited, given the small trade volume between the two countries. An estimated 98% of all Argentine products sold to Israeli business and consumers comprise agricultural goods.

  6. Mercosur-Southern African Customs Union (SACU): An agreement on goods with the SACU (Botswana, Lesotho, Namibia, South Africa and Eswatini) that came into force on April 1, 2016.

  7. Mercosur-Mexico: An agreement on goods came into force on December 28, 2016.

  8. Mercosur-Egypt: An agreement on goods came into force on September 1, 2017.

  9. Argentina-Brazil: Signed a trade agreement for the automotive sector on October 3, 2019. The agreement provides for free trade in automotive goods, starting on July 1, 2029, with no conditions. Until the free trade is finally achieved, the pact provides for gradual increases, with immediate effect, in the allocated volume of vehicles traded between countries, but with no tariff charges.

Under Negotiation

  1. Mercosur-Canada: An FTA is being discussed between the block and Canada and is in early stages of discussion.

  2. Mercosur-European Free Trade Association (EFTA): Negotiations are underway with the EFTA bloc (made up of Iceland, Norway, Liechtenstein and Switzerland) to reach a treaty similar to the one agreed with the EU. The deal is expected to be agreed on in the second half of 2019.

  3. Mercosur-EU: A trade deal was struck in June 2019 between MERCOSUR and the EU, allowing for the elimination of nearly all tariffs on two-way trade. The deal would provide preferential access for Argentine exporters to the European market, increasing its appeal as a location for investment by European companies. The deal is now in the stage of finalising protocols, after which it will have to be approved by the European Parliament before it can come into effect.

  4. Mercosur-Caribbean Community: A trade pact is under negotiation; however, progress has been slow. This agreement is set to ease the trade process and help Argentina diversify trade partners, but trade flows with Caribbean countries are limited and there is little potential for significant expansion.

  5. Mercosur-South Korea FTA: Talks concerning a possible FTA between Mercosur and South Korea commenced in September 2018. South Korea is Argentina's 14th-largest import market and the implementation of an FTA could improve access to South Korean goods in Argentina, while simultaneously opening options for reciprocal trade.

Sources: WTO Regional Trade Agreements database, Fitch Solutions

7. Investment Policy

7.1 Foreign Direct Investment

Graph: Argentina FDI stock
Graph: Argentina FDI stock
Graph: Argentina FDI flow
Graph: Argentina FDI flow

Source: UNCTAD
Date last reviewed: November 11, 2019

7.2 Foreign Direct Investment Policy

  1. Argentina offers investors a large and diversified market based on commodities exports and the services industry, with the oil and gas and agricultural sectors, as well as consumer demand, driving international trade and economic growth over the medium term. There are no regulatory barriers on foreign investment in Argentina and the government continues to express its desire to increase foreign direct investment (FDI) inflows.

  2. The Argentine Investment and Trade Promotion Agency (Agencia Argentina de Inversiones y Comercio Internacional) facilitates the investments of both local and foreign companies as well as assisting businesses to export their products.

  3. Under the country’s Investment Development Strategy, industries such as food and beverages, renewable energy, biotechnology, software and IT, creative industries, wine industry, automotive industry, technical and professional services and capital goods are the key priority sectors.

  4. While some restrictions on FDI will remain in place, particularly over the short term, many restrictive policies have been reversed with the election of President Mauricio Macri in November 2015, such as the removal of capital controls. The new administration has moved to improve relations with countries such as the United States and the United Kingdom, reached an agreement with holdout investors that has allowed Buenos Aires to return to international capital markets, and actively sought FDI in industries such as hydrocarbons and power, which have suffered from years of underinvestment.

  5. The Argentine government offers a number of incentives in order to attract FDI, some of which apply to all industries and some of which are sector specific. The free trade zones (FTZs) and special customs area of Tierra del Fuego offer a number of tax breaks and customs duties exemptions for all export-oriented industries located within them.

  6. The lifting of capital controls in December 2015 and the deal agreed with Argentina's holdout investors in March 2016 have considerably improved the outlook for the banking sector and the availability of credit for businesses. Banks can now access hard currency without restrictions for the first time since 2011, paving the way for more expansionary lending policies. This will also be encouraged by falling inflation and a more stable economy, which will allow interest rates to come down. Consequently, businesses will be able to obtain credit at more affordable market rates, promoting new ventures and the expansion of existing projects. Loan demand is expected to grow robustly in line with improving business and consumer confidence, while banks will be increasingly willing to lend as inflation tempers.

  7. State-owned enterprises are present in a number of sectors in Argentina, including transportation, banking, utilities and energy. Most provide public services and face the same tax and regulatory obligations as private businesses.

  8. To attract productive FDI that leads to job creation and to promote the development and diversification of domestic exports, Argentina has established numerous incentive programmes. These programmes are implemented by the national, provincial and municipal authorities and include sector incentives as well as relocation, innovation, technological development, employment, investment financing and export promotion incentives.

  9. Foreign ownership of rural land in Argentina is restricted to 15% of the entire productive area.

  10. Mining companies are required to use Argentine-flagged ships to export minerals and must purchase capital goods, spare parts, inputs and services domestically. They are also exempt from national taxes on basic utilities (telecommunications, gas, electricity, mains water, sewerage and drainage) provided within the zones.

Sources: WTO – Trade Policy Review, International Trade Administration, US Department of Commerce, Agencia Argentina de Inversiones y Comercio Internacional, Fitch Solutions

7.3 Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive ProgrammeMain Incentives Available
FTZs have been established in Argentina since 2004, and there are 11 in existence. So far, the main FTZ is La Plata, inaugurated in 1997 in Buenos Aires Province.Imports of parts and components into an FTZ are free of import duties, while goods produced in an FTZ can be imported duty-free into the rest of the Argentine territory. By receiving the ‘Made in Argentina’ origin qualification, goods produced in an FTZ will also be granted a preference margin within Mercosur. Generally, investors located in FTZs benefit from customs duties exemption, removal of non-tariff trade barriers and 100% foreign ownership permission. They are also exempt from national taxes on basic utilities (gas, electricity, mains water and sewerage) provided within the FTZ.
Special Customs Area – Tierra del Fuego ProvinceBenefits available include: customs duties exemption, removal of non-tariff trade barriers, 100% foreign ownership permitted, lower taxes on electronic goods and profit tax exemption.
Sector-specific incentivesSome sector-specific incentives for the software development, biotechnology, forestry, hydrocarbon exploration and mining industries include guaranteed fiscal stability for a set period of time (no increase in income tax liabilities), tax exemptions on imports of capital goods, and early VAT reimbursement. For micro-, small- and medium-sized businesses, government subsidised loans and credit from the National Development Fund are available. In 2014, the government also introduced more favourable terms for investment in the hydrocarbons industry, including the lengthening of exploitation concessions from 10 to 35 years for non-conventional production and 30 years for offshore fields, in order to attract more funds to develop this vital sector.

Sources: US Department of Commerce, Fitch Solutions, Agencia Argentina de Inversiones y Comercio Internacional, World Free Zones Organisation

8. Taxation – 2019

  • Value Added Tax: 21%
  • Corporate Income Tax: 30%

Source: Federal Administration of Public Revenues Argentina

8.1 Important Updates to Taxation Information

Comprehensive tax reforms were passed in Argentina in late December 2017, which will ease the fiscal and administrative burden on businesses over the coming years. The most beneficial measure is a reduction in corporate income tax from 35% to 30% for fiscal years starting between January 1, 2018 and December 31, 2019, and to 25% for fiscal years beginning after January 1, 2020. The measure will be somewhat offset by new withholding taxes on dividends, but these will nonetheless reduce the tax burden on businesses and generate greater investor confidence. In addition, over the longer term, social security payments by employers will be simplified by the unification of contributions into a single rate of 19.5% on gross salaries by January 1, 2022.

8.2 Business Taxes

Type of TaxTax Rate and Base
Corporate Income Tax30% for the first two fiscal years from January 1, 2018. This will be reduced to 25% for subsequent periods.
VAT- 21% standard rate
- 0% on exports, sales of books, bread, milk, medicine and the rental of real estate for housing purposes
- 27% applies to telecommunications, water, gas and other utilities not rendered to dwelling-purposes real estate
- 2.5%, 5% or 10.5% for certain transactions
Capital Gains TaxCapital gains derived by tax-resident companies are included in taxable income and taxed at the regular corporate tax rate. Capital gains derived by foreign residents from the sale, exchange, barter or disposal of unlisted shares, quotas, participations in entities and titles are subject to a 15% tax (indirect sales are included under certain conditions). This tax may be calculated on actual net income or on 90% presumed income, thereby resulting in an effective 13.5% tax on the sale price.
Withholding TaxDividends:
7% on dividends for income obtained for the first two years starting January 1, 2018; dividends are taxed at 13% for subsequent years.

35%; A reduced rate of 15.05% applies to:
- Financial institutions
- A bank or financial institution not situated within a low-tax/no-tax jurisdiction
- The Interest on bonds issued by certain sovereigns with which Argentina has no formal treaty for the avoidance of double taxation
- the interest in question is related to the financing of depreciable property (movable property)

35% on 35% of the gross paymenty for royalties (applicable to non-residents); the property which relates to the royalties in question must be registered under the National Copyright Bureau.

Certain types of royalties are taxed at differing rates; for example, royalties pertaining to the distribution of sound or image faces a withholding tax of 35% of 50% of gross payments.

A further withholding tax is applied to non-residents, with the rate ammounting to 35% of 80% gross receipts of the royalty given that the property in question is registered with the Argentina National Institute of Industrial Property (INPI). If the property peratining to the royalty is not registered with the INPI, the rate increases to 35% on 90% of gross receipts.

Technical services:
35% on 60% of gross receipts if the service fulfils two criteria; the service pertains to a property registered with the INPI and is not otherwise available within Argentina.

If the servicein question only fulfils the requirement of being registered with the INPI, then the rate increases to 35% on 80% of receipts.

If the service does not fall in to one of the above two categories, the rate increases to 35% on 90% of receipts.
Stamp duty- Varies between Argentina's 24 taxable jurisdictions; the standard rate, however, is 1%
- Stamp tax on real estate can range between 2.5% and 4%
Financial Transactions Tax- 0.6% tax on payments involving a bank account via the seller or the buyer
- 1.2% tax rate on any transaction made via a bank or financial institution without the use of an account
Wealth Tax0.25%; Certain companies are exempt from this tax if they have met certain requirements from 2014 or 2015.
Social security contributionsBetween 23.5% and 26.7% (of an employee's salary) paid by employers

Sources: Federal Administration of Public Revenues Argentina, Fitch Solutions
Date last reviewed: November 11, 2019

9. Foreign Worker Requirements

9.1 Foreign Worker Permits

There are various forms of work and residence visas available to foreign workers. Technical residence visas are issued to foreign workers engaging in specific technical or professional activities over the short term. Permits are valid for between 30 and 90 days and may only be issued to the same worker twice in one year. A labour contract visa applies to workers employed by a local company for an extended period and is initially valid for one year, but may be extended indefinitely.

9.2 Localisation Requirements

There are generally few barriers to employing foreign workers in Argentina, though the process of obtaining work and residence permits is arduous and bureaucratic. Nevertheless, there are no minimum thresholds for the number of local workers, quotas for employment of expatriates, or requirements for training or knowledge transfer for Argentine nationals. Consequently, businesses are free to hire as many foreign staff members as necessary.

9.3 Visa/Travel Restrictions

In addition to working visas, foreigners must apply for an entry permit and a national identity card, which requires documents including the employment contract, birth certificate, criminal record and qualifications certificates, all of which must be officially translated into Spanish and legalised. These obligations are greatly reduced for Mercosur citizens, who do not require entry permits. Nationals of several countries including Hong Kong, the United States, the United Kingdom, the EU and several South American countries do not need a visa to enter Argentina for tourism or business, for a maximum of 90 days.

Sources: Argentine Ministry of Interior, Fitch Solutions, Agencia Argentina de Inversiones y Comercio Internacional

10. Risks

10.1 Sovereign Credit Ratings

Rating (Outlook)Rating Date
Caa2 (Rating Under Review)30/08/2019
Standard & Poor'sCCC- (Negative)30/08/2019
Fitch Ratings

Sources: Moody's, Standard & Poor's, Fitch Ratings

10.2 Competitiveness and Efficiency Indicators

World Ranking
Ease of Doing Business Index
Ease of Paying Taxes Index
Logistics Performance Index
Corruption Perception Index
IMD World Competitiveness56/6361/63N/A

Sources: World Bank, IMD, Transparency International

10.3 Fitch Solutions Risk Indices

World Ranking
Economic Risk Index
Short-Term Economic Risk Score
Long-Term Economic Risk Score57.053.751.2
Political Risk IndexN/A103/202101/201
Short-Term Political Risk Score
Long-Term Political Risk Score61.661.661.6
Operational Risk IndexN/A109/201102/201
Operational Risk Score46.646.949.0

Source: Fitch Solutions
Date last reviewed: November 11, 2019

10.4 Fitch Solutions Risk Summary

Argentina's short-term economic outlook has deteriorated as the economy has fallen into recession amid financial market volatility. In 2020, the economy will likely remain trapped in recession. Investor concern related to the new government, coupled with high inflation and interest rates, will depress investment and spending, only partly compensated by a good external tone. The risk of a disorderly debt write-off and unsustainable policies further cloud the outlook.

Argentina's operating environment has seen a steady improvement following the election of the moderate and pro-business president, Mauricio Macri, in November 2015, despite the recent currency depreciation and market turmoil. The reforms implemented by the Macri administration are allowing foreign investors greater opportunities to take advantage of Argentina's developed economy, with a broad agricultural and industrial base, regionally low crime rates, adequate transport connections to major cities and ports and a skilled workforce. However, the absence of long-term planning in government policymaking over the last decade has undermined the operating environment, raising numerous barriers to doing business. These include underinvestment in logistics infrastructure, poorly implemented education reforms and interventionist economic policies that pose obstacles to international trade and foreign investment.

Source: Fitch Solutions
Date last reviewed: November 13, 2019

10.5 Fitch Solutions Political and Economic Risk Indices

Graph: Argentina short term political risk index
Graph: Argentina short term political risk index
Graph: Argentina long term political risk index
Graph: Argentina long term political risk index
Graph: Argentina short term economic risk index
Graph: Argentina short term economic risk index
Graph: Argentina long term economic risk index
Graph: Argentina long term economic risk index

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Political and Economic Risk Indices
Date last reviewed: November 11, 2019

10.6 Fitch Solutions Operational Risk Index

Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Argentina Score49.052.842.450.450.4
Central and South America Average46.049.545.246.243.0
Central and South America Position (out of 20)8
Latin America Average48.450.748.944.649.3
Latin America Position (out of 42)2315331022
Global Average49.750.349.8
Global Position (out of 201)102881329197

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index

Graph: Argentina vs global and regional averages
Graph: Argentina vs global and regional averages
Operational Risk Index
Labour Market Risk Index
Trade and Investment Risk IndexLogistics Risk IndexCrime and Security Risk Index
Costa Rica56.353.660.352.0
Argentina 49.052.842.4
El Salvador42.6
Regional Averages46.049.545.246.243.0
Emerging Markets Averages46.948.547.445.845.9
Global Markets Averages49.750.349.8

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: November 11, 2019

11. Hong Kong Connection

11.1 Hong Kong’s Trade with Argentina

Graph: Major export commodities to Argentina (2018)
Graph: Major export commodities to Argentina (2018)
Graph: Major import commodities from Argentina (2018)
Graph: Major import commodities from Argentina (2018)

Note: Graph shows the main Hong Kong imports from/exports to Argentina (by consignment)
Date last reviewed: November 11, 2019

Graph: Merchandise exports to Argentina
Graph: Merchandise exports to Argentina
Graph: Merchandise imports from Argentina
Graph: Merchandise imports from Argentina

Note: Graph shows Hong Kong imports from/exports to Argentina (by consignment)
Exchange Rate HK$/US$, average
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
7.83 (2018)
Sources: Hong Kong Census and Statistics Department, Fitch Solutions
Date last reviewed: November 11, 2019

Growth rate (%)
Number of Argentine residents visiting Hong Kong15,989-12.9
Number of Latin American residents visiting Hong Kong190,316-2.8

Source: Hong Kong Tourism Board
Date last reviewed: November 11, 2019

11.2 Commercial Presence in Hong Kong

Growth rate (%)
Number of Argentine companies in Hong KongN/A
- Regional headquarters
- Regional offices
- Local offices

11.3 Chamber of Commerce (or Related Organisations) in Hong Kong

Argentina Chamber of Commerce in Hong Kong (ARCHAM)
Address: 9A, 9/F, Hilltop Plaza, 49 Hollywood Road, Central, Hong Kong
Email: info@argentinahk.com
Tel: (852) 9197 7683

Source: Agrentina Chamber of Commerce in Hong Kong

Consulate General of the Argentine Republic in the Hong Kong SAR
Address: Room 1517, Jardine House, 1 Connaught Place, Central, Hong Kong
Tel: (852) 2523 3208
Fax: (852) 2877 0906

Source: Consulado General en Hong Kong

11.4 Visa Requirements for Hong Kong Residents

A visa is not required for HKSAR passport holders for stay up to 90 days.

Source: Visa on Demand
Date last reviewed: November 11, 2019

Content provided by Picture: Fitch Solutions – BMI Research