Don’t cry for me

Argentina’s economy has survived recurring states of crises, alternating between periods of recession and high economic growth. The economy, and its people, need to be better equipped to be more resilient to shocks. Encouragingly, bold reforms have successfully turned Argentina’s tumultuous economy around.

Now that the economy has been broadly stabilised, the OECD’s Multidimensional Economic Survey of Argentina 2017 recommends further reforms to ensure these advances can be sustained and shared. In particular, priorities should focus on raising productivity and competitiveness, while reinforcing people-centred growth so that the benefits reach all Argentines.

The remaining challenges facing Argentina are threefold. First, longlasting macroeconomic stability must be achieved to counter economic crises, which are often rooted in fiscal problems. This can be achieved by reducing the fiscal deficit and bringing down inflation. Second, Argentina has a long-standing problem as a weak performer in investment and productivity compared to its neighbours. Reforms are needed in competition, trade, infrastructure, and skills, among others. Third, inequality, poverty and informality are still undermining growth and well-being. Improvements are needed in education, regulations, taxes and law to better protect student and workers, and improve outcomes.

While Argentina has made significant strides in improving the economy, the report warns against the threat of falling back into crisis and leaving large parts of the population behind. Many Argentines are still struggling to make ends meet: a third live in poverty and another fifth are at risk of falling into poverty. Now that the foundations have been laid, Argentina should maintain momentum and break away from a pattern of crisis.

©OECD Observer No 311 Q3 2017