Argentina - Current economic position and prospects

-TURN TO "IC-pORTS DESK If I r1n RESTRICT E D w0 IL U R.L Re o ortN o. WH-114a This report was prepared for use within the Bank. It may not be published . : L .. uA i.. u..:.g h ak 's.L ..- The Bank accepts. no responsibility for the accuracy or completeness of the contents of the report. Tk DM Ar TATAT IA MV V 'nPNa1.qrTTTTT0N AND DEVELOPMENT A 11A I N LI "A A J %.I AXJ.J AJL~ A JJ14 £ A, A% £ ~~. . - - '.-' - - - = I- - -.- -- - - - - - CURRENT ECONOMIC POSITION AND PROSPECTS OF ARGENTINA January 11, 1962 Dnartmrnprlt rf (InpatAnni Western Hemisphere APPROXIMATE CURRENCY EQUIVALENTS US $1. 00 = 83 pesos (free market rate) 1 peso = 1. 2 U. S. cents 1 million pesos = US $12, 500 TABLE OF CONTENTS Page No. BASIC DATA ............................... i SUMMARY AND CONCLUSIONS .................. ii I. INTRODUCTION . ............................ 1 II. IMPROVING DOMESTIC FINANCES .............. 3 III. EXPANDING INVESTIENT AND INDUSTRIAL .UTPTUT ............................... 8 I0. LAGGING AGRICULTURAL OUTPUT AND EXPORTS .. i11 r.DBALANCE OF PA35n5E NT, r5 EXT'lERNALJ INDEBTEDNESS AND CREDITORTEMESS .................. 15 Following Page No. STATISTIAL APENDIX ........................ 17 i BASIC DATA Area: 1.1 million square miles Population: Approximately 21 million, increasing by about 1.8% each year Gross National Product, 1960: 785 billion pesos Origin of Gross Domestic Product Use of Gross National Product (percentages of current values for 1960) Livestock and agriculture 22 Gross domestic investment 21 Industry and mining 22 Consumption 80 Construction 4 Exports 11 Services 51 Imports -13 Credit, Money and Prices: (percentage increase during period) Jan.-Sept. 1959 1960 1960 1961 Money Supply 44 26 14 5 VV11. LCL rVj-(;e6 Y . Government Finance, 1961: (billions of pesos) National Government Revenue y09.3 National Government Expenditure 131.,8 Deficit 22. (transfers to State Enterprises included in total expenditure: 43.1 billion pesos) Public Expenditure as Percentage of Gross Domestic Product in 1961: National Government and State Enterprises: 21 Provinces and City of Buenos Aires: 9 Total 30 Balance of Payments, 1961: (millions of US$) Exports 991 Imports 1,420 -429 Services. etc. 111l External Reserves, gross,November 41 19Q1?1 million NZvember 30, 1961: Approximately $1.6 billion ii SUkMARY AiM CONCLUib 1 Three years have naw passed since Argentina's "new economic policy" was initiated, at a moment when the country had been driven to the verge of financial collapse by the misguided policy of the Peron regime. Considering the magnitude of the problems to which the stabilization program was directed, much progress has been made. The Government's budget deficit has been reduced sharply and Treasury recourse to the banking system is now negligible compared to the recent past. Important steps are being taken to reduce the deficits of the state enterprises which are being subsidized by the National Treasury. In the light of an improved political, institutions and financial environment, important sectors of the Argentine economy are rapidly being recapitalized. Total output, and especially industrial output, have begun to grow much more ranidly than in past years. Indeed, many cf the acute financial problems of the moment can be traced to the very raTid pace at which investment and economic activity have been expandingo 2. But very difficult problems still remain. Further budgetary improvement may be more difficult to achieve. The balance of payments is in serious deficit at the moment.* The businescommnity+ is struging~ to adjust to the sharp reduction in liquidity in 1961, and is pressing hard for new credit expansion in large amounts, High costs behind high protective walls remain a threat to industrial prospects. Perhaps of most fundamental Ninety-five percent of Argentina's exports consist of livestock and agri- cultural products. Present export levels cannot be raised in sustained fashion unless the productivity of the agricultural economy can be increased- Rising costs, much higher rates of return on investments in other sectors and export market uncertainties make any such increase uncertain at the moment, 3. The prospect is thus for difficult financial and balance of payments problems during the next few years when service payments on external public debts remain extraordinarily high. On public external indebtedness alone, Argentina will in the next three years have to make service payments of the order of $300 million each year, equivalent to 251 to 3o% of probable export earnings in those years. Substantial repayments to the International Monetary Fund scheduled in these years will raise the demand for disposable exchange further. Present peak burdens reflect the composition rather than the level of indebtedness and are rather short-lived. However, Argentina caniot meet these payments and still maintain the present investment eff?ort without further capital inflow on public and on private account. The most urgent preoccupation of the Government at the moment is accordingly to maintain a pace of capital inflow that will enable it to complete what has already been started in enlargine the industrial base and in improving grossly deficient and urgently needed energy and transportation facilities. In the public sector, substantial new commitments have been undertaken re e t y n -;,4 - ---y --~ -J - 4-L -UI tL - amou -E. ,Jj~ 4, 4LI C.ii-1 4 --I±.1 -3J. - -~i i I), extend burdensome service levels further into the future. h. Argentina's outstanding debt service record and the seriousness of purposeo u s ouvernmien-t sugges t tat Argentua ureiu will be preserveu at all costs. But in the circumstances, Argentina can reasonably continue to sek dL1;Unce frUm responsibue foreign lenduers only to the extent that it can show them vigorous and effective efforts to deal with the fundamental problems of the Argenuine economy aid to tne extent that it can demonstrate that its investments are directed to high priority projects within the frauework of a sound financing plan. T TNTRO)TITTON l The last full economic report on Argentina (WH-97a, June 23, :1961) I1 descr-+bet.n +,'Pl -'Lowh +sw h Argo+jnn ornnnmyi hn fqilpn -when t.hA present Govarnment t.cok office in May 1958. Daspite a wealth of natural resources, a litera-te pouJIat ion abudal -- technical ski"lls, the economy had been stagnating for years, A once prosperous agriculture nau vueen ± uecurge uu ioutm ',a asao uou and heavily protected industrial development, and was no lInger able to supply a growing home market and to generate export earn..gs 11A:-,D adequate to provide for the growing demand for fuels, industrial raw materials, and capital goods. Efforts to raise investment levels boun n the public and the private sectors and to subsidize consumption of urban labor groups had for years been misdirected and in excess of what the country couj.d afford to spend, By 1958, the economic deterioration had reached critical proportions, Power and transportation facilities had been allowed to become so inadeouate as to be major obstacles even to the normal functioning of the Argentine economy. Despite the availability of domestic petroleum reources, petroleum imports had been allowed to become a major and growing fixed charge cn the economy's export earnings. Swollen and inefficient state entorprises had been allowed to unbalance seriously the Government's finances. Large wage increases and huge fiscal deficits financed by credit expansion were producing an accelerating inflation and a rapidly deteriorating balance of payments. External indebtedness had become high and exchange reserves had fallen to their lowest post-war level. When the Government changed hands, the country was on the verge of a financial collapse. 2, Three years of effort to stabilize and rehabilitate the Argentine erconomyv have rh c~r yrt Hr-n "'. rc r r4- 'o -, nht~ eliminated and flexible markets have again become important in the process of alocaing resources,Tedmsi iacshv mr' osdrby Investment and output in some sectors have increased markedly and total. outpt a begVun o grow agai U ur 1-PiuLy than in past years. ratterns of work rules and other aspects of labor discipline that were inherited from t Uh Peron Ca and have weigeu heavily on the entire economy are graduelly being improved. Private economic activity is being encouraged and efforts aebi mae ou transfer activities from the public to the private sector0 Deficient essential public services, notably in power and transportation, are beng or are about to be improved. A fundamental change in petroleum policies has enabled Argentina to become virtually independent of potroleum . UZ* 11iI improvements made thus far have still to be consolidated and made permanent. Years of economic deterioration, of capital consumption and ustorteu incentives are not correctible in three brief years, especially when new economic policies require difficult changes in political dogmas, D . -n the light of the problems that were encountered three years ago, important progress has been made. - 2 - 3. The various sections of this report appraise briefly this progress and the still outstanding problems in the main areas of the Argentine economy. Their principal conclusion is that a lagging agricultural sector, from which virtually all of Argentina's exports derive, is still hindering seriously the rehabilitation effort and threatening Argentina's otherwise favorable longer-term economic prospects. External financing has been required to sustain a high level of public and private investment, and external indebtedness has accordingly increased further. The burden of this indebtedness is extraordinarily heavy for the next few years; yet much new borrowine is still reauired to finance urgently needed new investments, especially in the public sector. The savings capacity of the Argentine economy is high. but the ability of the economy to transfer these savings abroad to finance debt service and the additional imports needed for a large investment effort is at nrPm-n. lowuT in rplntinn tn cpmnnds in nrosnect for the coming years. Major efforts are accordingly still needed to raise the timsetoy m nim4ew ov-rnrow ngson+J -q nf +.h Araotein onf etrn al fina thn ia time to manage new borrowings that a sounder pattern of external financial obligaions may emn,.-r- - v" +hec "-v, fnr, moj ,FLA/~5 -f --~ - -J~ ---. 5 - 3 - TT IviPRANTTMT) 1,MPTT' TTMAMYlA The Public Finances h. Large budget deficits and regular resort to the banking system tfinance national goenmn exediue wer-e untlu± LLJ- UmaCJor and chronic source of inflationary pressure in the Argentine economy. The improvements wrought in the Government's inances in te past two years must accordingly be listed among the major accomplishments of the stabilization effort. Government expenditures have been financed increas- ingly out of nomal revenue. With the help of much improved tax admini- stration, tax receipts have been raised sharply, more sharply than rising prices and a normal increase in the tax base would otherwise have allowed. Since 1959 Treasury revenues have increased regularly as a percentage of the gross national product. New expenditures have been kept within the limits of new revenues, and the Treasury's cash deficit as a percentage of ite expenditure has accordingly declined from 31% in 1959 to 18% in 1960 and 17% in 1961, and is exp.ected to decline further in 1962. Recourse to the banking system has been reduced to proportions which are negligible compared to the very recent past. Government borrowing is now primarily from the social insurance funds and other official institutions. 5. The National Government's own activities have not been deficit- producing. Treasury revenues exceeded expenditure other tnan 1ransfers to state enterprises by 15% in 1960 and by 23% in 1961. The proportion for 1962 is expected to be lower, but there will still be a surplus. However, in each of these years the surpluses were more than offset by transfers to state enterprises. In 1961, for example, Treasury transfers to state enterprises totalled h3.1 billion pesos. almost twice the overall cash deficit of 22.5 billion pesos. Although part of these transfers has helnPd finnnon new investments, imnrtnt nortions have been used to helo service indebtedness which the enterprises cannot support and to pay for onerating deficits. Subsidies for oneratinL deficits alone amounted to 18.3 billion pesos in 1961 (equivalent to 3220 million). 6. Important steps are being taken to reduce the impact of state enternri P. on t.h hnriopp Th_ proramn w ow undor way to rporanniz, the state railways and to transfer parts of the Buenos Aires transport system nq wel as som on f t.he se-rice opezraionQ of t.he rail1ways. to -nrivatep ownepr- ship is intended to relieve the Treasury of the heavy burden of subsidizing then la Y re% oeat+ingr lnose+ of tese nerrss Treasurr py-vmeznts fr operating deficits of the state railways alone exceeded 13 billion pesos (equivalent to AlA million) in 1961 *The recen+tlr initited tighter control over new borrowing by state enterprises is also intended to relieve VEtO 1-1.4ge+6 ;_ -U~,Ji.LL ' - +1,^.110 1JJ04-±.± --tO -4JjP +k t. '.. UX4 t- tAL 1. oL EcoUmy fur new ourrowing., Cun eLIrPrL.Ib prUpLniig UO Uurrw 1IUsb now demonstrate that ib will be able to service the proposed debt. Further relief is expected from the gradual transfer of various services now provided by the National Government to the provinces, whose revenues have been growing even more rapidly than the National Government s revenues in recent years. A start is being made in the field of education. How- ever, all these measures affecting expenditures will be gradual in their effect. Problems are still being encountered in resolving issues raised by the proposed reorganization of the railroads. Substantial effort will accordingly be required to make possible continued improvement in the National budget, especially as revenue are not likely to continue to in- crease as fast as they have been increasing. Revenues from taxes on ex- ports, which have been important sources of revenue, are shrinking as these taxes are being reduced to help exporters. In 1960, export "retentions" alone accounted for over 10%o of all Treasury tax revenues. Future improvements in tax administration may be more difficult than in the past two years. 77 There is, unfortunatell, little basis at the moment for appraising the significance of Argentina's public investment plans for the Government's finances. Such an appraisal cannot readily be made even for tae current investment effort. The public accounts lump invest- ment and debt service together and do not reflect expenditures financed by foreimn borrowing. Full information about past investment and sources of financing and about expenditure plans of the various investing agencies of the Government is not readily available. As a matter of general tendency, however, the major programs in prospect should not affect adversely the overall position of tne National Treasury described above. The big investment programs in roads, energy, river transport and steel will be made thrmnah decentralize ngennit -unh as the Hicrhwv DPanrtment or the Water and Energy Department, or through state enterprises such as the merchant14 --ee or __-e ste com 5 each. wAth ---~ own r-t-{fn' As long as new expenditure programs are tailored.to agency resources, new nha4rP-=.qnon t.hp. nqAonql hiirip.t np,-H not Pri-,P_ Thp St.pt.p TAR Comnany's new southern pipe line project, for example, about to be initiated with capacity of this prosperous and expanding enterprise to service. The road ced from the highway department 's own separate budget to which extra- budgetary fl-nds are assign-ed. qr)VTq A1 .o+ 1 a-nin - - or- which new borrowing abroad is planned, is expected to be financed out of earnings * T.he renova,ti on of the stt erhn fleet is expected tO b, financed from the sales proceeds of old vessels and from earnings. The to be financed, as at present, initially by foreign companies and ulti-- mt eLy from the- prceso-etoemsls4Tesr-uprtfre 4ti -5- ev e 1 Aco-- n.+ i n th-, eeBunnc JA ii r es a r ena s0 an o,, tt. oorc s oanY c ne~. power company, with the help of IBRD financing, is expected to take over W,it- 1JJ~I U LlU. 61 CUI IL L _L _L U U Ul U .LLIV UO UIt;L1 U CUILL LAB= 0 tI-V Ltot 01 present obligations virtually all out of earnings. The rehabilitation of Wit: raIevIaui W.LsL ruqulleu uo[1LnAueu anlu iieavy uurt=!U abzLJi UauUe Lur juite years, but this need not constitute a corresponding additional claim on the Treasury 11 the program to eliminate operating deficits can relieve the Treasury from its present substantial obligations to subsidize these operating deficits. 8. The expectation tnat public investment will be kept within tne limits of public saving and foreign borrowing is based on the critical assumption that the review of agency budgets and the control of new commitments by state enterprises will be made really effective. Otherwise, the old process of today's commitments becoming tomorrow's need for new subsidies from the Treasury to service excessive debt and to complete half- finished projects will just continue. Furthermore, if Argentina's already excessive debt service burden is not to reach unmanageable proportions, foreign borrowing will also have to be restrained. The problem of exter- nal indebtedness is discussed in Part V below. 9. Expenditures of the public sector as a whole are large, and expanding. Expenditures of the National Government, of state enterprises (except for operating expenditures financed from their own resources), of provincial governments and of the City of Buenos Aires were together equivalent to 241 of the gross domestic product in 1959 and 1960, and may exceed 30% of the total product in 1961. With such proportions of total domestic expenditures being made through various public budgets, it is significant that, in both the National and the local Government budgets, expenditures classified as investments are increasing more rapidly than non-investment expenditures. For 1961, the proportion is one-third at both the national and the local levels- 10. Effort is being made to rationalize this growine public invest- ment. A Federal Investment Council was established two years ago by, and for assistannn to the nrvinces of Arqntina. In Anust 1901. a decre2 was issued directing tftat a National Development Council, consisting of nri irnf.p r-i 1-.i 7ipncz nnti ~ . n-r 3 r . p- 'h-ir . Mi~ ni q+.r nyf 7.-rnn7r - hp orpn.pr in the office of the President of the Republic. A staff and a work pro- gcram are now beuingr deverlnoed Thep tasks-c of t.he Coumnil mae. t o fine lnog.- term development goals, formulate annual and longer-term investment pro- grams, help develop projects- n tohral asistdne pram n snt the carrying out of studies, etc. to promote and coordinate the country's -6 - budgets are growing more rapidly tnan the National Government's; they aproimt one-th.ird Of t0tal p, -ub~lic enditnA ures bugt f,4,~ or 19P3. This decentralization of the public sector will probably continue in pace WLLI UIt,-e growt o4 new cenV t ers Lj_L :I U[I± LU ULV . LiY. _4LU L is t Li111Z:U. policy of the Federal Government to accelerate the economic development of Wte provinces. nowever, aspects oi ecoomic and LiaEcial puliy formulation at the National level, such as agreeing on the sharing of national revenues between the national and provincial governments and on the pace at which local governments should borrow abroad for local works, could become more difficult as this decentralization proceeds. Tne Credit Supply 12. The Government has eased substantially the problems of monetary management by reducing its demands for financing from the banking system. In sharp contrast to recent years, virtually all new bank credit is now being directed to the private sector. This improvement is but another aspect of the present policy of the Argentine Government to stimulate wherever possible the growth of private economic activity. 13. Nevertheless, Argentine monetary problems remain acute4 Thile the rate of credit expansion has been reduced steadily each year since 1958, it has still been excessive in relation to the goal of price and excnange stability. In 1960 total bank credit was still expanding at the rate of 276 a year and credit to the private sector at the rate of 35% a year. The January-September figures for 1961 are appreciably lower than comparable figures for 1960; however, because of the much-reduced rate at which private time deposits and government deposits grew in 1961. compared to 1960, net credit expansion increased rather than declined. Meanwhile, after a year of price stability in 1960, domestic prices began to rise. On the basis of January-October data. they rose in 1961 at an annual rate of 17% a year. The resumption of domestic price increases, couoled with a sharoly deteriorating balance of Dayments and declining foreign exchange reserves in 1961, has weakened the general climate of confidence. nrovoked doubts nhout t.he viability of the nresent exchange rate and reduced willingness to hold peso balances, thereby aggravating nlrPniv r1iffiril1+. nivrrint. nyohlm of mTnrn+.niry =nnnmnPn+. "F. n cntrast ton arl ie ayeas wheyo.TIn exlichng rese4MTreacP ua tion caused the money supply to increase as fast as, or faster than, bank credit, large sales of exchae in 1961 e-vented the money supplv from increasing even in pace with new bank credit. The Central Bank's holdings million between March 31 and November 30, 1961. During the first nine - IUL'A.11 144 .17. V. dLJ.Lt LIUJL-L.4 Wttld%.LZ V U.LU .LLL1toUCLK- L.)) -)/O CLLIU. %,.1LUkA.V U L1 -7 - tne private sector oy tyh, tne money supply IJcreaseu y ouy 50 Vu1ri domestic prices rising at three times this rate and the volume of economic activity also increasing more rapidly than in 1960, liquidity declined sharply. Much-needed working capital at reasonable cost is now in despera- tely short supply. The cost of non-bank money has been rising sharply: 2% per month is described as "normal". The marketability of negotiable securities has declined. Average share prices at the end of October 1961 were 48% below their level eight months earlier. Private indebtedness is said to have risen very sharply; trade paper is reportedly circulating like money, with many endorsements, in very substantial amounts. Public issues of Government paper, which were begun hopefully in 1960, are in these conditions no longer feasible. The current financial climate is widely described as one of "crisis" and the monetary authorities are being pressed hard to ease the credit supply and restore liquidity to more "normal 11 proportions. 15. It is the intention of the Government, expressed in commitments to the International Monetary Fund when its standby arrangement was renewed in December 1961, to preserve a free exchange system, restore price stability and maintain the oresent foreign exchange value of the peso. To this end, the monetary authorities have undertaken not to relax credit but rather to pursue a much tighter policv than in 1961 and thereby curb the excess demand for exchange and commodities which earlier credit expan- qion made nonihP, investment is continuing at a fast pace and the demands for working capital ar isn.The. p rduction of duur_r _ ~ivnb1e_ _mn, wi (r)1vPrnrPn±. encouragement, especially automobiles, is rising rapidly. In addition, wag se I-- +4- ,-.n -,4 4--- - , -- ---+ , r- i n - + , o4n .~e sA n oa ~ cl the marked shift that took place after 1958 in the distribution of income L-±UI Wae U UflU a Ia e iU jfI _L L, LU U U1 4 LIa _e-]L _±1jL JYLA L J has undoubtedly been helping to finance much of the accelerated investment in plant and equipment tEhat- C , k has bee gon on since it has not 1 hel mitigate the pressures for wage adjustments by strong labor unions. Real folloinome, viruav doung o rsesi Ari after teinr9 inr thecirs following the virtual doubling of domestic prices in 1959 in the first reau'justmIe1 -n ts of the1 tabliJJ.ZationE pi-ui-i are still at about _L7_U -Levels., III. EXPANDING INVESTMENT AND INDUSTRIAL OUTPUT restrictions at the end of 1958, when the stabilization program began, puvrJu d LE1Uai}tZ:CLZ>tZ:L[L p Lufjauu a Ut:L_LiLE1U Lli UL;i1ii a UivtLy. The gross national product deflined by 5% in 1959. Though sharp, this adjustment proved temporary. The total product has since been rising again, more rapidly than in past years, and especially rapidly in he manufacturing industry. During 1960 total output increased by ah and industrial output by over twice that rate. The figures for 1961 are expected to be even higher. 18. An impressive increase in the national investment effort has provoked this renewed surge of activity. One-fourth of the 1960 gross national product was devoted to investment and the proportion for 1961 may be higher still, There have been occasional years of comparable investment effort in the past. However, today's high level of investment reflects not increases in construction but an increase in the pace at which machinery and equipment have been flowing again into the Argentine economy. After years of being starved of capital goods, there has been a great rush to renew worn out and obsolete equipment as well as to establish tne many new areas of activity which have been opening up in recent years. 19. This accelerated re-equipment of the Argentine economy is reflected clearly in the import picture. While total import values in 1960 were of the same general order of magnitude as those of the several years before their drop in 1959, machinery imports (not including vehicles and parts) were more than twice as large in 1960 as in earlier years. One-third of total 1960 imports were classified in this way. Machinery imports are still rising and the totals for 1961 are expected to be con- siderably higher than in 1960. 20. Industrial expansion in the future may not continue at its present rapid rate in all fields. The sharp increase in 1960 in tractor production proved to be excessive and production levels have been cut back. Automobile production, which quadrupled in volume in 1960. has since continued to increase further, but the prospect for the next few years is more one of readjustment and consolidation -- there are currently more than twenty separate automobile producers in the Argentine market -- than of continued large increases in outout. 21. In t.he np-tpr f iP1 Aq~ e)f nnt.ivi tvy howpvi-r- ePansqi_n coild be'h- as high as, or higher than, in the recent past. By decrees of June 1961, Snpeill iInenniv werep aem bril for new inN ivesTPnt. in w t 1 nrd in petro-chemicals. In September 1961, similar incentives were offered - 9 - for new investment in pulp and paper. Special incentives were also made available in July and October 1961 for new investments located in Patagonia and in the Northeast. Important new projects are being developed under these decrees, most notably in expanding basic steel-making capacity. The large complex of supporting industries which has grown up around the much enlarged automobile- truck- and tractor-assembly capacity in Argentina should continue to expand as imported components for these products gradua- lly decline. A new decree of August 1961, governing future automobile production and imports, is intended to accelerate the pace at which domestically-produced components replace imported components for this industry. Parallel increases in the proportions of domestically-produced components may be expected in other activities. New investments in the production of railroad equipment are also in prospect. 22. Some of the most striking expansion in recent years has been in fuels. Crude oil output rose sharply under the new petroleum policy initiated by the present Government through which, with the help of foreign oil companies. Argentine fields were exolored and developed at a much more rapid pace than had been possible before. Production in 1960 was 80% hicher than in 19q8. and fimires for the first half of 1961 indicate that expansion is continuing. Imports of crude oil and of fuel oil have deoline] dr]tiall in consnnqenn. relasing much needed foreign ex- change for other imports. Crude and fuel oil imports amounted to $240 million- Pnnivalentt+.o lm+ 90nof q n+..q imnnr+ in 197 Rv 1960. they had declined to $80 million, and they should be even less in 1961. Argntina rill cnn+inue + imnnt a varit+v of npeial nit.rnlinm nrroct but is otherwise about to become self-sufficient in petroleum, and in fact may, hAre small surpluses for export for a few yiearso few years ago, is becoming an important source of energy in its own right. is new and present distribution facilities still limit demand. Production i fnv +h T mr, l-1 _Pi min n Q-ir1 i nCv 100(1 ITnQ (0fl1_ higher than in 1959. Production in 1960 was more than double that of especially for industrial purposes, the State Gas Company is about to 1- .. ) _*~ Z' - 1 4.- U- ~ 1 ( V Uegini contru tio oILL ajL VI nc )V.L 1iU jJJJt;L11t- UU UCLII- V IiUl--~ ldtLI L V miles from the southern fields to the Buenos Aires area. 24. In brief, the variety and scale of Argentine industry is clearly expanding. New energy- aM durale goods-producUg activiLies are being added to an already long and well-established network of consumers' goods industries. As the development of consumers' goods production in the past led to reduced imports of this category of product -- from 30, to 40% of - 10 - total imports before the Second World War to less than 10 of total imports by the late 1950's -- so it is now hoped that the domestic produc- tion of durable goods, capital equipment and industrial materials will help reduce the degree to which the Argentine economy will depond on these categories of imports in future years. 25. But there are two clouds on the industrial horizon. The first relates to costs. Price inflation, subsidized credit. subsidied imoorts through preferential exchange rates and virtually absolute protection from external competition made up the environment in which much postwar industrial expansion was initiated. Costs and efficiency were of secondary concern in such circumstances, and industries were established which now require very high protection for their survival. Subsidies and preferen- tial exchange rates no longer exist. but levels of orotection remain hiah. Many segments of Argentine industry receive 100% or more protection. The nroblem of industrial costs is sufficientlv apneral to ha ennse of wide- spread concern. The current process of industrial re-equipment and the nrosnet that the Pnn. Aires electrin nor nrnarrm will onn rPlipvo industries of the burden of having to make substantial investments to produce thei-r mn nnnT- +. n I -n n f -nnti a n ov k nnli l hIln importantly to reduce costs. Readjustments forced by the stabilization Pr-a have raised -+ nJ.ns an the i-mai Annair -nn tition which is accompanying the industrial expansion process is also h v ng. +-e D11+ ___ _;_r -,r-114 h4 rr4 1,,e~ - -- vrnr ca4,v.. ,,r 4-4 11 -',1n, Al VI A Vil12 0 LL O JUo C LA U ' UQ V £Ll iiia iJ 0 a± L 0- QU I~' as to raise questions about the industrial export potentials which some AtUVU Ld Alun 1L i at.u dvouU U1= J 1L1C, U LUVVt1 F1_LVu U.LVCL kaLII IO 01U 4.4 have on domestic industry. 26. The second and much more general question relates to the struc- ture of tie Argentine ecUrIomy as a woule, Arge iUne uusEry L EIUU now nor soon likely to become independent of imported capital equipment and materials. The long-term prospects for Argentine industry are accordingly closely tied to the long-term prospects for the Argentine balance of pay- ments, and thieSte, in tun are_ tie to the prset fo agiulue from - ---4- -P_ which virtually all of Argentina s exports derive. At this moment, the prospects for Argentine agrIcUlture dU o appear overly promiing. - "I.J.J - IV. LAGGING AGRICULTURAL OUTPUT AND EXPORTS 1, - - 1 .1. "~U L4 Ft-, L UL UUU IC1~ L±j current developments gives much ground at this moment for expecting ±11~~~ J± ,tIUJ C%1,±iUUj.L,U1±C: _11 W,it; LIaE ±l I'uL, 1WUVJ._±LU11_ standing the rich physical potential of the country to increase produc- tin f rains and C ±llly of liet c l andte comprative auvrautge that Argentina enjoys internationally in these lines of endeavor. 28. In recent years agriculture has been virtually stagnant. True, the Uecaue of the 1950's was not one of impressive economic growh for Argentina. Between 1950 and 1960, the real gross domestic product in- creased by less than 20%, i.e., no faster than the rate of population growth. But agriculture's contribution to this performance was very small. The contribution of cattle production to the total product was lower in 1960 than ten years earlier. The contribution of agricultural production to total output was almost 50% higher at the end of the decade than at the beginning but virtually all of this increase took place at the beginning of the period. The increase since 1953 has been negligible,, 29. The production history of the major export commodities tells a similar story. W.heat production in 1960 was about what it was ten years earlier and well below levels reached in the 1930's. The area sown to wheat has been shrinking gradually over the years. Corn production in- creased considerably during the fifties as both areas sown and yields obtained increased. but current levels are still very substantially below those of the 1930's. The increases in wool production since the mid- fifties consist primarilv of a recovery to levels of earlier years. The potential for beef production is increasing as herds are being rebuilt after abnormally heavy slaughterinps in 19q7 and 19q8. but as of 1960 beef production was still not appreciably higher than in 1954 and below the level reached in 1940L 30. Point-to-Doint comnarisons of outnut of nroducts subiect to sharp year-to-year changes in weather and in the incidence of plant and animal diseases should be read with cantion. However the hroad ni-.ture that emerges seems fairly clear. Agriculture has not been growing. This nicture is consistent with the mannn of inf1iiPnPPq thnt hq hP.n affecting Argentine agriculture adversely for years: the world depres- sion of the thirties, +.ha qatnn- rldWnI and npice and exchange con- trols, now eliminated, which were long geared to subsidize industrial problems a pervasive legacy of doubt rooted in recent experience and aggravated by a vari4etyofohrfcos Faitesorrnprig products to markets are inadequate. Costs of inputs such as vehicles, equipment, fetiluzers, pesticides and herbicides are nign. Ine credit - 12 - properties stifle incentives to improve and invest in these properties. those currently obtainable in agriculture, tend to inhibit new farm invest- ment. migration to the cities is creating labor shortages on the farms. 32. Furthermore, the incentive to produce for export is shrinking. Local costs and prices have been rising while foreign prices and the exchange rate have not. Export taxes established at the beginning of the stabiliza- tion program to absorb "devaluation profits" are being eliminated to provide relief from rising costs, but the margins remaining for further reduction are now limited. Also, export market prospects are full of uncertainties as Western European countries struggle to formulate common agricultural policies, the content of which could affect vitally Argentine access to these areas, which comprise her major markets. 33. Much attention is now being devoted to the urgent export market problem. The Minister of Economy, with senior government officials, visited Argentina's major European markets last summer to seek assurance that Argentina's access to these markets would not be limited by new protective measures. At the same time, new markets for Argentine products are being sought in other regions. Uncertainties about markets are undoubtedly act- ing as deterrents to agricultural expansion. However, Argentina's funda- mental long-term aricultural problem is one of supply. The statistical picture described briefly above reflects a lagging, and in some sectors a shrinkina. farm economy. Argentina is not now surfeit with unsold products; rather, the reverse is true. 34. This judgment, with all that it implies for future export pros- nPntR. nr-rPennndC mib +.II. frmiIsnr h-r AreYntinA. Minister of Cnmmernce a few months ago: "... in this period of marked industrial development, it is necessar.Ly for the farm economL~11Iy UUto dveo 44-S~ prod-ti.~LA~vJe potential ... To this end, the National Government has adopted a clear and deliberate_ poiy -a hw by its actions to encourage and assure the placing of our farm products in all the world markets, be they traditional or not. But ishoulu e clear that the fundamental problem of the moment is not really the placing of our surpluses (which is adequately aI_ureu), but their relatively low volume ... We must not be concerned about producing export surpluses because of a fear of marketing problems, which can always be resolved in some fashion. Rather, there is a much.more serious problem ...: That of not having any export problems at all because of a lack of export products."!l /1 "La Agricultura y Otras Corrientes en el Desarollo Economico Argentino": an address delivered on August 14, 1961, in celebration of "Dia del Cerealista", and published in the 1951 stativt2,cal yearbcfk of' the deols. de C4rccleo", pges -L, talic- are ,s In the original., -13- ,,,-.e wou-- +n- . +i.Tr% q - m ln +nx v-r .dn i nff Lrr n+-nn I farm economy., The first is at the level of farm technology and farn practcs an stp areU u.L LngLJ L1aken hee eseialI inrltint beef cattle. Two years of research and demonstration and limited exten- sii Worn lave LeU Lm1Ube WoT[1g ILLI Uli.LZ area Uu LuVL.Ut wvinu aLmCa. are accepting and valuing the role of better techniques in their cattle operations ana are oeginning to reaIize by how iuch economio retu un be increased in the process. On the basis of this experience, the cattle economy now appears ripe for efforts to reproduce UIs inital effort on a much bigger scale, and for a large program to develop Sown perennial pas- tures. In addition to raising the productivity of farms, permanent. pastures would, with an animal feed industry and storage facilities suitably located about the country, reduce sharply the cattle growers' present dependence on the annual harvest of forage grains and grasses. A drought would not then force farmers to ship cattle to market before their prime weight was reached, depressing prices and values and depleting herds unnecessarily as has been the pattern until now. 36.- In the grain economy, a new system of negotiable grain warrants, which will enable grain farmers to finance their operations more rationally and permit storage facilities to be used more fully, should increase efficiency considerably. 37. However, to raise the productivity of agriculture in Argentina will ultimately require substantial new investment in the farm economy; and to brine this about is not a technical but an economic problem. Argentine agriculture is a price-sensitive commercial agriculture. Unless the incentives to make such investments are appropriate, there is little reason to expect past patterns to change. 38. The policy problem does not appear to be simply one of raising in pm, n-mq: +Jhr, brert in q sriniltirp_ Tht reoval of exchanLe and price controls and subsidies and relative price developments in recent irwnn did nrovide general income incentives. but with apparently dis- appointing results. True, drought delayed and rising costs cancelled much nf +.ho cni+.nit. rpqnnr)- thq+.q.q Pyninted at the beLinninL of the stabilization program. But were new price and income incentives proidd -aai oro , _^port.ion o)f the new income flows into agriculture might well not remain in agriculture but flow 4-; - 4-A 4- o+ - ---- - +In- -^rmv in r. nf hirchpr invpst- jJJ.. e ~ad U V 11 V L/'14 'JJ 1 /f '.1- '''." ment yields, 39. The implications of this appraisal for Argentina's export potentials arNn n.nr 4rOswnt traditional grain crops has been stable or declining in recent years. A1te t.h drasti dl i cattle hedsL In197and .L9t8i d urin which A.fter the drastic decline in cattle herds in 1957 and 1958, during which breeding stock -a-s slaughtei)ed in hlig1her than avrg prprins nhr - lb - has hen a rebuilding of herds. This new investment hv e;ttl- grower. was encouraged by the exchange reform and the freeing of internal prices wiirh le toi . markedPr i n-ceases in domTnP+ic p-ricesP for Ii vestocnk andi its, products. However, recent drought and resultant premature slaughterings )intr in+ nrynTh+arl +IiiQ Yn, o a fn-ni ncy my',n r't tr'l i4 c- nnrl -r-n~r11i,+i nnQ~ i n breeding stock again. The proportion of breeding stock to total slaughter- inigs, at least in +k P1,n- A;- -L- 1-1- -1C ~ -4 1QcA1 than in 1960. This most recent setback will probably not be as serious as that~ of a.) -fe -Fear ag J. TUVV LLL 4-esoc prce have bee ri-Li ng O--L since mid-1961. But it does illustrate sore of the problems encountered in UAj4 _LICL1 LJ.VZ--DUkJkn P VIUUULIL LUE1 ciJ J_U Uj J±t=:e[ iLY) U1_r'L11Lz't;U@ 4V. if uthis broad agricultural picture and international price levels were to remain basically as they are, the only conclusion to be drawn would be that the export picture would probably also continue fairly much as in the recent past. Export potentials cannot reasonably be expected to increase in sustained fashion at the expense of the dominant home market. The sharp reduction in average meat consumption in 1959, for example, which accompanied the contraction in real wages at that time, has since been reversed and consumption levels are rapidly increasing again toward earlier norms. 41. This prospect would mean that exports would continue to fluc- tuate in a $1 billion to $1.2 billion range with livestock products, mainly meat, hides and wool, accounting for roughly half of total export values. Agricultural products, mainly grains and grain products, would account for most of the remaining half. Total exports were just under $1.1 billion in 1960. In 1961, wheat and corn exports were drastically below normal because of the drought, bringing total exports down to the $1 billion level, but export values are expected to be up again in 1962, back in the .t.1 billion to '1.2 billion range. Such a pattern of level exports would, of course, imply a gradual increase in total production levels to supply a home market which, on the basis of present population growth, should expand by some 30% in the next five years. 42. The actual prospect could be somewhat better. The whole tone of recent Argentine policy in economic matters has been to confront difficult problems praamatically and directly. Concern about a lagging agriculture and its implications for the rest of the economy appears to be growing. Reductions in export taxes, special credit terms for tractor purchases by small farmers and for new crop development in problem areas. special provisions for amortizing agricultural investments under specified circumstances, a renewed effort to combat foot-and-mouth disease more effectively than hitherto. a newly aLxressive exoort market drive at the government level - these are recent beginnings of measures to n-iPve nartimilnr obictive in the nsritniltural Rector. The lrgent effort to improve transport facilities will have its most direct impact on tHei farm econonmir- The reasonnable Pv-r,ei-.in at. thisz momnt wouildl bem - 15 - for fu,v+rhe.fr + neo + his trn-pe an r,- +hus Some imprren+ 4 v prospects. But the improvements that may reasonably be expected will C,J~LJ LIIJ. PU.L U . J. V L U I~b i lJ Z F U L CI, u beginning of the stabilization program. At that time, the incentives offeredUy Li= [ne-Wy-j'reeu priceLU ad rna'Ll-le 1-1 e C h Ca n i bs~ IAU~ J_-3 provoke much larger output responses than have actually occurred. The present consenus La that export values migIub reasutuauvy Ue expecteu uU rise over the next five years to a $1.2 billion to $14j billion level, i.e., by about 10%, as a result of moderate increases across most of Argentina's quite varied export list. )43. This estimate could prove to be conservative. New export products, now small in amount, could develop further. The long-teim demand prospect for meat in a world of rising incomes is encouraging. With suitable incentives for investment in expanding and reorganizing beef production, processing and marketing, Argentina would be well placed to share in such an expanding market and could thereby increase present export levels appreciably, provided that potential buyers do not decide for reasons of internal politics to reserve most of tne new demand for domestic suppliers, regardless of higher cost. But new investment would have to be made in meat-processing and -storage facili-- ties, new marketing organizations would have to be developed, and the productive potential of tie livestock industry would have to be increased further. Under favorable conditions these developments could occur fairly quickly. But they do not yet appear to be underway on a major scale. V. BALANCE OF PAYfENTS, EXTERNlAL INDE23TEDNESS AND CREDITWORTHINESS Mh. The various acn ts of the Aevntine conam wrhich have been discussed in the preceding paragraphs have been giving rise, not surpri- sing1v. to serious trade and nn-mPnt nroblems. Tn the face of level export earnings, the demand for imports for new investments and for an In marked contrast to the balanced trade of 1959, the first year of the stab1-ilIizatnion"porm the trad" alne 1 961 is expcte to- be4- over, $400 million in deficit, mainly because of increased machinery and vehiclo 4mn '+o 'PTl +n+nl 4m-n-+ -411 'kill 10P4- 1 1 4114-- will be some 1O4< above its 1959 level and about 20% above the 1955-960 14,. J4. .~.UU YV J IuUL-Ly UcaU. z~APortswere at a low point because of drought, and imports were at a peak because of the equipment, aided by tight credit, and a tighter administration of the LuLns under Va"Ach @iuIo -1-1 a U-JUUoUe pcarts may lin ftuute be imported for local assembly, should compress imports soon to more normal levels. with the reduced need to purchase fuels abroad, an import bill at about the $1.2 billion level of past years should be consistent with a level of activity higher than in those earlier years. Developments under way in industry should reduce further the extent to which rising output and investment will, in future, depend on rising imports. 46. However, with present export prospects, these improvements are not likely to be either quick or large enough to relieve the pressure of the extraordinarily heavy obligations on external in- debtedness which Argentina faces in the next few years. Cn public external indebtedness alone, which totals about $1.6 billion, Argentina will in the next three years have to make service payments of the order of $300 million each year, equivalent to 25% to 30% of probable export earnings in those years. Substantial repayments to the International Monetary Fund scheduled in these years will raise the demand for disposable exchange even higher. Debt service pay- ments are of such magnitude as to raise immediate questions about Argentina's ability to meet them. 47. Argentina's outstanding debt service record and the serious- ness of purpose of the present Government suggest that Argentina's credit will be Dreserved at all costs. The Deak burdens are rather short-lived. They originate from the excessively brief maturities of nast obligations. which are forcing Argentina to repay its debt with undue haste. The same total indebtedness at more normal average ttrms would he mnh more manageable. However, Agniacannot mee thee jaymnt- an-sil maintain the present investment effort without further capital inflow on1- priv a te and o n pulc a cc ou nt .PV*, Th mos urgen preoccupationof the Argentine Government at the moment is thus to maintain a pace of _~.LUdJ1 JILL-LOW ULdlau W-L-LL Ui LUJ_t _LLU U ;jfjt.,JUt- MICLU LICLO C;-" ;C%A started in enlarging the industrial base and in improving grossly It must do this if what are now serious obstacles to economic growth sion. The Government is keenly aware of the price Argentina is now paying for bau borrowing practices of past years and for uinustrial development initiatives which were not always appropriately conceived in relation to Argentina'S economic ituaIion auu prospect. But as this legacy cannot be erased by decree, it is endeavoring to prevent a repetition of past mistakes and, at the same time, prevent the burde of these mistakes from forcing it to retrench in politically dangerous proportions. 49. Argentina's external indebtedness is accordingly still rising. Some $600 million equivalent of new public debt was contracted in 1961. Not all of this addition represented new investment: 4114 million of new government bonds were issued in exchange for the outstanding share -1'7 capital of the Buenos Aires electric power company in connection witn the reorganization and expansion program for Buenos Aires power, and 04,L million of' Treasury notes were issued in settlement after long delay of claims for private power properties taken over by the Govern- ment in the past. The principal new project commitments were 4189 million for the southern gas pipeline, $168 million from official and international lending agencies and from suppliers and contractors for the national highway program, $42 million for a dam and for a develop- ment credit program in the provinces, and $40 million of government borrowing for general financial purposes in Western Europe. An addi- tional $360 million of new public borrowing is in immediate prospect: the present $95 million loan for Buenos Aires power, about $100 million for the railroads, some $70 million for SOMISA steel, and about $95 million of smaller loans for highways, provincial power development, agricultural development and housing, 50. These large totals have not raised the orders of magnitude of debt service above the peak burdens that were discussed in the last detailed economic report on Argentina. New borrowing since that time and some rescheduling of debt have. rather. extended Peak burdens for several more years than were then contemplated. 51. With present export prospects, a debt service burden of the nresent order of Ar-entinnts may be sustainable for a fairly short period of time. But the assumption of new commitments, even at longer term, which wu1d maint.nin the hrden at that. lvel for aIn neriod is another matter. The pace of recent new indebtedness, though for urgently needed projects, hasbegun to have this effect+.Annual service obligations on existing indebtedness do not now fall below the e;;"V"J JIJ-L-L-L- L l el be v,± eI 1.76 1 e A. v ;ullcu VV.L 111 DU. V.% VA. vll1 V V I immediate prospect mentioned above, but not including large new invest- menU now unUer stuuy sucu- as tne El Chocon Mu_LUL-pUrpeU pwoCv VI the Salto Grande hydro-power project, or additional financing for the amount to some $225 million in 1966, and would absorb 190 to 20% of probable export Ear-1n-ings atULU that IA tm. . ostantial new external borrowing iu ueb3raue to susbain a increase the level of public investment and the momentum it has imparted to economic activity. In the circumstances described, however, Argentuina can reasonably continue to seek finance from responsible foreign lenders only to the extent that it can snow them vigorous and effective e.norts to deal with the crucial problems discussed earlier, and to the extent it can show that its investments are directed to high priority projects within the framework of a sound financing plan. STATISTICAL APEENDIX I. EXTERNAL PUBLIC INDEBTEDNESS 1. Summary of External Public Debt Outstanding including Undisbursed as of December 31, 1960 with Major Reported Additions to October 31, 1961. 2. Estimated Contractual Amortization and Interest Payments during 1962-1968 on External Public Debt Outstanding including Undisbursed as of October 31, 1961. II. NATIONAL ACCOUNTS 3. rns National Prnut. by h T nd hv Origin, 19I1 -1Q00 TTT TTMATT.TrPY 4. Industrial Employment, Production, Wages, 1951-1961. I C ~ +e DPAAna+4 Tw-rw+c ta +4 10nCi-eA 1060 6. Tractor Production and Imports, 1956-1960. 7 I-or- Ueh4i 'Dr,4 m -A Tm-A -+e TO---10- 8. Petroleum and Natural Gas Production and Consumption, 9. Electric Power Production, by source, 1954-1960. IV. AGRICULTURE 11. Area Sown to Major Crops, 1937-1961. 111, r%n - .4 I---.. -l-n..L ITZ-1 -1 . Vvita alu k 1 - Area, XrouuLioU, -e.U-, unsuUpuLLL, Export, 1931-1961. . Wool Production and Export, 19"-1o96' 14. Oil Seeds Production and Vegetable Oils Exports, 1955-1961. 1>. Export Retentions Collected, by major commodity groups, 19ou. 16. Principal Export Taxes as of October, 1961. V. PUBLIC FINANCES 17. Treasury Cash Budget, 1959-1962. 18. National Treasury Cash Revenues, by source, 1959-1962. 19. National Treasury Transfers to State Enterprises, ly52-19oz. 20. Holders of Central Government Obligations, 1956-1960. 21. Consolidated National Budget, 1958-1962. 22. Consolidated Expenditures of the Public Sector, 1958-1962. VI. THE BANKING SYSTEL 23. Origin of the Money Supply, 1956-1961. 24. Bank Credit, by Origin and Destination, 1956-1961. VII. PRICES 2". Index of Wholesale Prices of Domestic Products, 1956-1961. -2- 26. Balance of International Payments, 1958-1961. 27.. Exports, by Value and Volume, 1951-19U 28.. Imports, by Value and Volume, 1951-1960. 29. indexes of Export and import Prices, 1951-190u. 30., Official Gold and Foreign Exchange Reserves, 1958-1961. Table 1.: Summary of External Public Debt Outstanding Including Undisbursed as of December 31, 1960 with MTajor Reported¯Additions to November 30,¯1961 (thousands of U.S. dollar equivalents) Debt outstanding IMajor reported December 31, 1960 additions Item Net of Tncluding January 1 - undisbursed undisbursed November 30, 1962 r nr -Týr .r')NT A~ L, TT ,T rrN =TyrrM n -? n i n n-i ø Qfr, r'n4 n ~i- TOTJ-1L i-XTERNA-iL P UriD.L 9u7,Lf27( L,224LU7, 596, Publiclv-issued bonds 23,158 23,158 11h,833 Pri vae-pla~cd debht. Ri 5, 577 30,32h TRDT) lon - -n8,00 TD Innn -- n U.S. 990 C,37 36, 9A 72 ,79 Export-Import Bank 212,070 301,15 73,319 rter 06,17 26A5 5,360ýi A \1' UlI . l ~ D U'.JVEJ.1ý -11 -LVCUIZ, C- L' d -.7L.L ( ý4~</J._____ Cothe Wester v loan 2,21 2f r,9 Q )ovie BJLoc creditS 3>L,U1U Lv,558 -___u N1,ationa"lized properties debt!''L 2,30 2,i Nýote: iiese total.s duo not inclde obligations to tie International Monetary Fun amounting to ?227 million as of October 31, 1961, debts repayable in pesos, nor debts w/nose service payments creditors have undertaken to reinvest :Ln Argentina. Source: IBRD Economic Staff. Table 2: Estimated Contractual Amortization and Interest Payments during 1962-1968 on External Public Debt Outstanding Including Undisbursed as of November 30, 1961 (millions of U.S. dollar equivalents) Total Service Payments 1962 295.1 1963 317.2 1964 305.2 1965 238.7 1966 205.0 1967 144.2 1968 115.1 Note: These totals do not include the following sums payable to the international Monetary Fund: 1 o, 02 million; 1963, $37.1 million; 1964, $96 million; 1965, $36 million; service payable in pesos, nor service payments which creditors have undertaken to reinvest in Argentina. Source: Central Bank and IBRD data. Table 3: Gross tional Product, by Use and by rigin, 1951-1960 1951 1952 1953 1954 :L955 1956 1957 1958 1959 1960 USE (billions of pesos, in 1950 prices) consumption.49.8 4 0 .3 5. 54. 54.6 550 56.3 54.6 56 L private 41.9 38.9 42.1 42.L 45.9 45.6 46.5 48.5 45.8 - public 7.9 3.0 8.3 8.7 8.7 9.0 8.5 8.3 8.8 - Gross domestie investment 16.0 14.5 11.6 13.9 14.8 13.9 16.9 16.8 14.3 17.9 Construction 9.3 8.1 7,6 8.3 8.8 8.4 10,0 10.2 8.4 9.0 private 5.8 5.5 5.0 5.3 6.1 6. 2 7.1 7.4 5.3 5.7 public 3.6 2.6 2,6 2.9 2.6 2.2 2.8 2.8 3.1 3.3 Capital equipment 5.4 5.2 5.1 4.9 5.8 5.9 7.5 6.8 6.1 8.8 Changes in inventory 1.2 1.2 -1.1 0.7 0.2 -0.4 -0.5 -0.3 -0.3 0.1 Net foreign inves--trent -1.7 -1.7 1.1 0.5 --1.1 -0.7 -1.5 -1.2 0.1 -0.7 Gross national product 64.0 59.7 63.0 65.2 68.3 67.7 70,4 72.4 68.9 71.8 Gross investraent as % of G.N.P. 25.0 24.3 18,5 21.4 21.7 20.6 24.0 23.2 20.8 25.0 ORIGIN (1950 100) Agriculture 118 90 140 135 138 129 136 145 148 148 Cattle 95 98 103 100 105 109 106 101 96 97 Fisheries 127 126 131 127 1:31 129 132 134 140 150 Mining 111 109 115 119 124 128 134 143 164 210 Manufacturing 103 95 93 L01 110 109 114 120 104 112 Construction. 98 84 79 87 90 86 102 .104 88 94 Commerce, transport, corrmunication 102 92 96 99 105 105 112 .116 109 116 Housing - finance 103 107 109 112 116 118 120 123 124 124 Other services 104 106 111 114 116 120 121 121 123 123 Total (gross domestic product) 103 96 102 105 1l 110 116 119 113 117 Source: Central Bank. Table 4 : Index of Industrial Ejloyment, Production Wa 1951-1961 (1952 = 100) Production Wages paid Cost Real wage Year Employment -------------- of inc ome Total Per worker Total Average living per worker per worker 1951 103.5 106.9 103.3 84.2 81.4 72.1 112.9 1952 100.0 100,0 100.0 100.0 100.0 100.0 100.0 1953 94.3 99.1 105.1 103.2 109.4 104.0 105.2 1954 95.3 107.5 112.8 121.6 127.6 107.9 118.3 1955 99.0 116.8 118.0 141.8 143.2 121.2 118.2 1956 98.0 116.2 118.6 158.8 162.0 137.5 117.8 1957 97.4 120.0 123.2 211.4 217.0 171.5 126.5 1958 96.5 124.0 128 .5 292.4 303.0 225.6 134.,3 1959 92.7 110.2 118.9 442.2 477.0 482.1 98.9 196) 85.5 114.7 134.2 568.1 664.4 613.7 108.,3 (Jan. -June) 1960 86.7 107.1 123.6 499.1 575.0 605.0 95.0 1961 3.0 120.3 145.0 610.2 741.0 659.0 112.5 Note: The coverage of the industrial indices is based on the industrial census of 1943, and their weights reflect the relative importance of each industry at that time. Since the most rapidly expanding industries are in new areas not adequately reflected in the 1943 weights, these series reflect developments only in a part of Argentine industry, and grossly understate its overall growth. Source: National Statistical Officeo Table_1: Steel Production, Imports, Gnsumntion, 1950-1960 (1,0CO metric tons) Production Imports C onsumpti on/1 Pig Ingots Finished Scrap Iron Other Semi- Finished iron and rolled and ore ores finished produets molds products pig iron products 1950 17.8 130.3 264.0 156.1 - 3.4 163.6 986.0 1,256.1 1951 19.0 131.6 296.5 95.3 - 4.8 180.5 938.6 1,238.1 1952 31.8 126.4 294.5 70.3 - 2.8 193.6 469.4 767.9 1953 36.3 174.4 274.6 92.9 - 3.1 79.9 363.0 650.4 1954 39.6 186.1 526.0 82.1 - 5.2 460.4 742.1 1,286.0 1955 35.0 217.7 658.9 288.5 - 1.13 605.9 868.4 1,543.5 1956 28.8 202.5 613.0 63.8 - 1.9 445.3 657.0 1,277.2 1957 33.8 221.5 683.3 178.6 - 18.2 422.3 631.3 1,326.6 1958 29.1 244.3 876.2 94.8 - 18.2 641.1 965.2 1,865.7 1959 32.0 214.2 776.0 138.6 184.8 9.7 568.1 824.0 1,627.7 1960 180.1 277.0 771.6 132.4 443.8 13.6 449.8 1,063.4 1,878.0 /1 Production and imports of finished products plus production of semi-finished products for foundry and other purposes. Source: Ministry of Economy. Table 6 : Tractor Production and ImWorts 1956-1960 (numbers of units) 195o 1957 195o 1959 196u Production Up to 30 horsepower - - 1,269 1,990 1,011 30/15 1.984 1;991 1 ;4A 1;653 4,138 35/40 1" " - - - - - 40//4 It 2,008 2,255 1,451 2,722 4,117 45/50 " " 1,362 1,612 1,418 451 - 50/55 1;8l. 1,5 2n 912 2, 961 55/65 2,646 2,870 3,270 4,838 8,731 9,845 10,578 11,083 12,566 20,958 Imports 10,637 4,232 5,537 318 442 Prouctovn plus iamot 20,4o2 14,81u 1u,u20 12,uu4 21,400 Source: Ministry of Economy. Table 7 : Motor Vehicle Roduction and Imports, 1955-1960 (,nnmbovrs of units) Production Imports Pro- ductioi Auto Pick-up Truck Station jeeps Vans Passen Trucks plus mobiles trucks chassis wagons ger and imporls Veh1iULes Usbt 1955 211 4,180 1,626 24 - 350 4,926 1,751 13,068 1956 300 2,40 57 26 2,389 170 8,932 7,929 22,80, 1957 465 3,884 7 4,996 6,282 1 10,778 33,556 60,969 1959 3,715 6,244 1 10,595 7,221 53 14,939 3,470 46,193 1959 6,746 8,145 837 11,544 5,361 319 6,090 88 39,130 1960 30,335 26,878 15,588 9,809 4,952 1,176 3,251 28,865 120,854 Table 8 : Petroleum and Natural G3s Production and Consumnption 1955-1D960 Jan. -June 1955 1956 1957 1958 1959 1960 1960 1961 Petroleum (millions of cubic meters) Production of crude 4.8 4.9 5.4 5.7 7.1 10.2 4-3 6.7 (millions of tons) Imports of crude for 3,7 4.4 6.2 6.7 5.5 .3.3 refining Imports of petroleum 3.4 4.1 3.2 2.3 2.8 1.8 oroducts Production of petro- 8.0 8.1 10.2 11.1 10.7 11.5 leum products Consumption of petro- leum products 11.3 12.1 12.9 13.7 13.0 13.3 (millions of U.S. dollars) Imports 165.7 202.3 276.6 209.6 180.9 125.6 - crude for refining 89.4 102.2 173.4 151.9 113.5 72.4 - fuel oil 48.4 72.2 67.0 27.7 27.0 6.6 - Other petroleum pro- 27.9 27.9 36.2 30.0 40.4 46.6 ducts tr Es (millions of cubic meters) Production 1,065 1,148 1,414 1,654 2,152 3,543 Consumption 719 764 852 866 861 1,383 Source: Ministry of Economy, National Statistical Office, Table 9 : Electric Power Production, by Source, 1954-1960 (billions of kilowatt-hours) Produced for nublie sale Produced for Total own use Thermal Hydro Total 954 5,202 340 5,542 900 6,442 955 5,586 316 5,902 n.a. 1956 5,921 475 6,396 n. a. 1957 6,322 547 6,869 n.a. 1958 6,710 665 7, 375 2,044 9,419 1959 6,596 778 7,374 2.073 9,447 1960 6,980 867 7,847 2, 525 10, 372 Source: Certral Bank, Ministry of Economy. Table 10: Beef Cattle-Herds, Slaughter, Production, Yield, 1954-1961 Herds Slaughter Production Yield For For Total Cows and heifers (midyear) export consumption as 5o of total - - (million heads) - - - - - - (million tons) (kilos/head) 1954 43.6 n.a. n.a. n.a. n.a. 1.8 1955 n.a. 1.8 7.7 9.5 36 2.1 227 1956 46.9 2.5 8.6 11.2 40 2.5 221 1957 44.0 2.5 9.0 11.5 44 2.5 213 1958 41.3 2.8 9.1 11.9 42 2.5 214 1959 41.2 2.2 6.6 8.7 37 1.9 222 1960 43.4 1.6 6.9 8.5 34 1.9 224 1961 45.1 n.a. n.a. n.a. n.a. n.a. n.a. Source: Ministry of Economy, Central Bank . Table 11: Area Sown toM.ajor Crops 1937-1961 Or (1,000 hectares) Crop year Oats Barley Rye Wheat Linseed Sunflowers Corn Total 1937/41 1,46411 854/1 1, 084L 7,820 3,004 471A 6,151 20,848 1942/46 1,841 782 1,558 6,596 2,262 1,226 4,302 18,567 1947/51 1,365 1,013 1,920 6,035 1,390 1,613 2,843 16,179 1952 1,189 872 1,996 4,791 641 1,609 2,532 13,630 1953 1,702 1,108 2,483 6,066 1,020 820 3,354 16,543 1954 1,500 1,085 2,445 6,354 732 571 3,269 15,956 1955 1,376 1,090 2,493 5,937 739 559 3,002 15,196 1956 1,450 1,251 2,580 5,210 675 1,397 2,888 15,451 1957 1,888 1,394 2,807 5,947 1,285 1,201 2,740 17,262 1958 1,913 1,371 2,859 5,308 1,444 1,673 2,860 17,429 1959 1,796 1,366 2,835 5,708 1,202 1,339 2,894 17,,140 1960 1,627 1,315 2,895 4,792 1,228 1,250 3,062 16,169 1961 1,589 1,211 2,660 4,275 1,129 1,132 3,222 15,218 /1 1939-1941 Source: Grain Board. Table_12 : Wjheat and Corn-Ar Production, Yield, Consumption, Exort, 1931-1961 Wheat C orn Area Production Yield Consumption Export Area Production Yield Consumption Export (million (million (1,000 (million (million (million (million (1,0Co (million (millin Crop hectares tons) kilos tons) tons) hectares tons) kilos tons) toni) Year cropped) per ha.) cropped) per ha.) 1931/35k: 7.2 6.6 0.9 n.a. 3.9 4.4 8.6 1.9 n.a. 6.9 1936/40/i 6.4 6.0 0.9 n.a. 3.2 4.4 7.7 1.7 n.a. 5. i 1941/45 : 5.2 6.4 1.1 n.a. 2.2 3.3 6.6 1.8 n.a. 0.4 1946/50-: 4.6 5.3 1.2 n.a. 2.1 2.2 3.8 1.6 n.a. L 1951 5.2 5.8 1.1 3.L 2.5 1.7 2.7 1.2 2.0 .3 1952 2.7 2.1 .,8 2.7 .1 1.4 2.0 1.4 1.6 1953 5.6 7.6 1.4 4.1 2.5 2.4 3.6 1.5 2.4 11 1954 5.0 6.2 1.2 3.1 2.9 2.4 4.5 1.8 2.4 2.2 1955 5.5 7.7 1.4 3.5 3.6 1.9 2.5 1.4 2.2 .4 1956 4.1 5.3 1.3 3.6 2.5 2.2 3.9 1.7 2.7 1.1 1957 5.4 7.1 1.3 4.:1 2.7 2.0 2.7 1.4 1.9 . 1958 4.4 5.8 1.3 4.0 2.1 2.4 4.8 2.0 2.8 1.7 1959 5.2 6.7 1.3 4.L 2.4 2.4 4.9 2.1 2.C0 2.7 1960 4.4 5.8 1.3 3.6 2.5 2.4 4.1 1.7 n.a. 2.6 1961 3.6 4.0 1.1 n.a. n.a. 2.7 4.9 1.8 n.a. n.a. , tq: Export data are for calendar years. 1 Annual average for period. Surce: Ministry of Economy, Grain Board. Table. 13 : Wool Production and Export,, 1955-1961 (thousands of tons of greasy wool) 1/ Production Export 1955 165 109 1956 165 109 1957 178 88 19 .8 18 10 -_ (,6 n ;m Note- Production dat- r o copyas,epotdt o calendar years. 1/ Mainly greasy wool. Source: Ministry of Economy Table 14: Oilseeds Production and Vegetable Oils Exports Tnuuouauas of tons) Production of seed Export of Oil ; Linseed Sunflower Peanut Linseed Peanut Others Total 1955 4O5 283 118 156 2/ 12 168 1956 238 75h 216 61 2/ 30 91 1957 620 625 318 16l 35 10 216 1958 630 759 290 162 5 75 292 1959 620 387 2-i 218 L q 207 1960 825 802 209 169 51 L 9OR 1961 462 600 22 -n.q n.n. na n Note: Production data, are Ifor cr n- I o +daafoclndar1qr irsrq iI nr -1-P A,,nf ntor +,r + - r mr'n+n acnA ni I T/ Less than 0.5. Source: Ministry of Economy. Table 15: Export Retentions Collected, By Major Commodity Groups, in 1960 (millions of pesos) Value of Retentions Retentions -I n - .3 -a-1 Upor -0LlectUu nxporu vajueU (1 (2) (1) t- (2) Livestock Products 36,788 3,550 9.7 Live Animals 1,522 114 7.5 Beef and Trimmings 9,277 885 9.5 utton and Trimmings 1,208 94 7.8 Preserved Veat 3.653 34h 9.L Other Meat 2,555 346 13.5 Hides: Beef Cattle h.568 702 14 Sheep 864 66 7.6 Other 295 37 12-h Cattle By-products 1,030 147 14.3 Wool 11.816 810 0_ Aricultural Products -777) 06h, 171 Wheat 11,796 2ll b.3 Crn In 2C 1, A'' 17.9 Oats 1,565 279 17.8 lnrl w I isin 997 -17 Rye So4 95 18.9 Miillet 396 71 18.1 e10L a 4 L o 71 .n Wheat Mills' By-products 1,493 246 16.5 Vegetable Oils: Edible 1,589 54 3.4 T4 _ 4- . ,nfA -1 7 ff Linseed V.7UU _LyI e.) By-products 4,328 690 16.0 Other Crop Products 658 135 20.5 Forest Products 1,248 26 2,0 Quebracho and Urunday Extract L, eo zo .U Minerals 10 2 20.0 Various 86 9 Total 75,877 10,110 13.3 Note: During 1960, retentions were suppressed on exports of quebracho products, and other agricultural products of lesser importance. Iit the same time, the UL-pult dUU-tfb 011 Utzt_!b - oi ltu eed aU linseed oil were reduced from 20o to 10%. Source: Central Baiik. Table 16: Principal Export Taxes as of October, 1961 indicate specific valuation for tax purposes) Retentions Tax Taxes Total Agricultural Products Linseed oil 10 10 2.3 22.3 Wheat, corn and most other grains 10 10 4.8 24,8 Wheat flour 20 10 2.3 32.3 Various vegetable oil by-products 20 10 2.3 32.3 Various oilseeds 10 10 4.8 24.8 Livestock Products j- ve sheep and cauole 10 10 2.0 22. Mutton, trimmings and by-products - 4 1.5 50 Beef, trimmings and by-products - 4 1.5 5.5 Most hides and skins - raw 20 10 2.3 32.3 - treated 10 10 2.3 32.3 Wool 10 10 2.3 22.3 Dairy Products - - 1.5 1.5 Note: On December 1, 1961 the sales tax on graini exports was eliinrated and various export retentions on agricultural products were reduced Source: Guia Practica del Exportador y Importador, Vol. V, No. 58, October, 1961, Table 17: Treasury Cash Budget, 1959-1962 (billions of pesos, fiscal years) 1959 196n 191 1 Q( Revenues General tax revenues 33.4 50.7 67.2 92.0 Tn- ,4or i -a ', vrae a n14, export retentions 17.9 25.8 33.6 23.1 Other income 5,8 .b.5 9.0. 57.1 85.3 109.3 129.1 Expenditures Central administration 39.9 48.2 56.8 85.1 Debt seric; 1..7 .7 Aq 10. Transfers to decentralized agencies and special accounts 6.1 1.5 1.3 11.1q Other 8.0 12.3 11.3 9.3 J7 ~. (JI _ . ( LJ'i* I Transfers to state enterprises 23.3 30.7 43.1 28.1 U'_.j ( jLV4.1+ -L_).L. U_ __ _ iL. . PinnIrin,-d Long-term bonds 3.9 12.4 15.9 13.2 Advances from Central Bank loans 7.7 7.4 1.2 Other borrowing from Central Bank 5.8 - - Other borrowing and use of cash balances 8.6 0.2 - Note: The fiscal year is November 1 - October 31. These figures reflect cash transactions and therefore differ somewhat from budget data. They in- clude only actual cash transactions of the Treasury; not special account and decentralized agency transactions included in Table 21 which do not pass through the Treasury budget nor expenditures financed by drawings on foreign loans. Source: Secretariat of the Treasury, International Monetary Fund. Table 18: National Treasury Cash Revenues,b Source, 1959-1962 (billions of pesos, fiscal years) 1959 1960 1961 1962 actual estimate General tax revenues 33.4 50.7 67.2 92.0 Customs duties 2.6 3.3 4.2 5.5 Excise taxes 4.4 6.6 8.4 10.1 income taxes 11,6 17.7 21.1 27.3 Sales taxes 5.8 10.7 14.6 20.0 Stamp taxes 1.9 2.9 4.1 5.5 Other taxes 7.1 9.5 14.8 23.6 Import surcharges and export retentions 17.9 25.8 33.6 28.1 Total tax revenues 51.3 76.5 100.8 120.1 Other incume 5.8 8.8 8.5 9.0 Total revenues 57.1 85.3 109.3 129.1 Source: Secretariat of the Treasury, international Monetary Fund. Table 19: National Treasury Transfers to State Enternrises, 1959-1962 (billions of pesos, fiscal years1 1959 1960 1961 1962 actual estimate Oprtng defc-t 107 13 9 q - 1$ n.lf 1 State Railways 8.0 7.9 13.2 6.5 Buenos Aires Transport 1.4 3.1 3.5 1.5 Other 1.3 1.8 1.6 2.1 Investment and debt service 12,6 17.9 24.8 18.0 State Railways 4.0 4.8 5.4 8.4 Buenos Aires Transpct - 0.1 0.2 1.0 State Petroleum Co. 2.8 0.9 4.9 - State Gas Co. - 0.2 1.1 0.8 Mixed Steel Co. (SCMISA) 0.7 4.5 4.6 1.0 Water and Power Agency 1.7 1.9 3.4 2.1 National Energy Directorate - 1.7 1.3 1.3 Telecormunication Agency 0.8 1.3 0.5 - Sanitary Department 1.1 0.8 1.5 1.4 Other 1.5 1.7 1.9 2.0 Total 23.3 30.7 43.1 28.1 Source: Secretariat of the Treasury, International Monetary Fund. Table 20 _-LLi 9 g v 1 -1960 l Officia Cetl ther ~ i ate Insra nce Total Insurance Agencies Bank fficial Banks and Other Obhers Funds Banks Companies (millions of pasos outstanding at end of period) 1956 58,132 43,805 1,622 4,250 5,909 827 491 1>227 1957 65,927 50,970 1,541 4,476 6,699 783 445 1,013 1958 91,589 55,739 1,569 21,143 9,146 2,988 418 586 1959 98,575 59,578 2,769 21,962 10,3841 2,412 489 524 1960 111,076 65,914 5,160 22,291 11,206 3,434 815 2,256 (nillicns of pesos increase during period) (total dcbt) 1957 7,795 7,16 5 -81 226 790 -44 -46 -214 1958 25, 662 4,769 28 16, 667 2,447 2,205 -27 -427 1959 6,986 3,839 1,200 819 1,695 -576 71 -62 1960 12, 501 6, 336 2, 391 329 365 1,022 326 1,732 (long-term debt) 19 8,609 7,165 257 308 1,113 -4 -12 -219 24,119 4, 669 -102 16,151 2,612 1, 297 -58 -449 1959 6,304 3, 200 182 945 1,718 601 -18 -324 1960 8,099 6,652 313 43 -1,625 1,048 38 1,630 (medium-term dcbt) 1957 -529 - -25 -82 -323 -69 -36 5 1958 404 - - 517 -165 - 30 23 1959 72 - 69 -128 - -13 18 127 1960 33 - -69 284 - -40 7 -150 (short-term debt) 1957 -236 - -313 - - 27 1 -1 1958 1,139 100 130 - - 908 I -1 1959 610 639 949 2 -23 -1,164 72 135 1960 4,369 -316 2.147 1 1, 990 14 280 252 oource: Centr'al Bn;. Table 21: Consolidated National Budget, 1958-1962 (billions of pesos, fiscal years) 1958 1959 1960 1961 1962 Tact a 1 T (estimate) (budget) EXPENDITURE Current Expenditure 46,2 84,0 92.0 128.3 136._ Central Administration 24.6 575 772 73.2 8901 Special Accounts 3.8 6.5 4.5 8.5 7.8 Decentralized Agencies 8.1 14.4 18.4 28.9 27.6 State Enterurises 9.7 15.6 12.9 17.7 9.9 Investment Exnenditure 169 23e6 30.8 h6.1 h.8 Central Administration 2.7 3.9 -.0 -.9 8.9 pecial Accounts 00 042 o.h 3.3 M__ Decentralized Agencies 4.7 4.9 6.8 18.1 18.4 State Enterprises 962 lb46 180 178 153 Toa xeniue4 1 1(176 122 19i 741 ~ 18M Central Administration 27.3 310 1 701 98.0 Specia2 Accounts .l1 67 4.9 11.8 11.0 Decentralized Agencies 12.8 19.3 25.2 47.0 46.0 DUT T 11L14.E 0, 0 167 1 General Revenues 100.7 120.1 Decentralized Agency Revenues 36.7 36.1 DEFICIT .) Note: Gross expenditures are shown here for all categories except State Enterprises, for which only transfers from the Treasury are shown. Investment expendituresdo not include drawings on foreign loans but do include amortization of debt. Source: 1962 budget presentation to Congress. Table 22: Consolidated Expenditures of the Public Sector, 195b-19b2 (billions of pesos) 1958 1959 1960 1961 1962 (fiscal years, budget data) National Government 63.1 107.6 122.8 174.4 180.2 kurrentI'~ .LPt21iU-LU1-U 4U*C U40U 7LOU -L-) )I4,644 Investment Expenditures 16.9 23.6 30.8 46.1 45..8 State Enterprise Investments n.a. 3.8 13.9 19.4 26.2 Provincial Governments and the City of Buenos Aires 10.0 4 _, (YOO Yo0U Current Expenditures 1.9 2 .T 39. 2. n.a. Investment Expenditures 3.9 8.8 -1). 27.1 n.a. Total Public Sector 81.9 1!6.O 1906. 273.4 3044 Current Expenditures 61.1 109.T 131.7 15.5 n.a. Investment Expenditures 20.8 36.2 59.2 92.6 n.a. (p e r c e n t a g e s) Investment Expenditures as % of Total Expenditures of: National Government and State Enterprises -- 25 33 34 35 Provinces and Buenos Aires -- 26 27 34 n.a. Total Public Sector -- 25 31 34 n.a. Provinces and Buenos Aires as % of Total Public Sector: Total Expenditures -- 24 28 29 32 Investment Expenditures -- 24 25 29 n.a. Total Expenditures as % of Gross Domestic Product at Market Prices: National Government and State Enterprises -- 18 17 21 n.a, Provinces and Buenos Aires -- 6 7 9 n.a. Total Public Sector -- 24 24 30 n.a. Note: These data include expenditures of the National Government. all provincial governments and the City of Buenos Aires. Information about other municinalities is not available. Onerating exnenditures of qt+n+,o nnm,-o',icp -rn-A ---m ~tt&S J~~ .. J.'.flr . . L LAS revenues are not included. Investment expenditures of state enterprises financed internalv or from snpeial sources are shown snarqtelv investments financed by transfers from the National Government are incinded among investment .--nn----- of+.o ----n ---venmnt. S- - Mj vi c+i i, r, T4o' 7 , r,,rr Tcble 23: Cri infthpM ncy S'only 1956- 1956, 1957 1958 1959 1960 1960 1961 (millions of pesos outstanding at end of period) Loans and Investments of the September Banking System 107,138 127, E 1-81 473 231, 13 296,654 6,602 33528 to: Private Sector 68745 0,98 106,890 129,582 175,459 161,445 209,277 to: Public Sector 38,393 46,785 74,513 104,551 121,195 115,164 125,971 Time Deposits and other Non-sight Liabilities of Banks -34,615 -45,493 -58,294 -74,655 -107,140 -105,803 -122,859 Deposits of Public Sector -16,692 -18,902 --23,673 -30,598 -43,852 -42,161 -48,595 Gold and Foreign Exchange Holdings of Banks 4,408 4,210 -677 13,282 33,035 33,761 23,524 MONEY SUPPLY 60,238 67,584 98,829 142,162 178,696 162)406 187,318 (millions of pesos increase during period) Loans and Investments of the January-September Banking System 2 630 5 5705 52,660 62,521 42,476 38,594 to: Private Sector 12,238 25,907 22,692 45,877 31,863 33,818 to: Public Sector 8,392 27,798 29,968 16,644 10,613 4,776 Time Deposits and other Non-sight Liabilities of Banks -10,878 --12,801 -16, 36L -32,485 -31,148 -15,719 Deposits of Public Sector -2,210 -4,771 -6,923 -13,254 -11,563 -4,743 Gold and Foreign Exchange Holdings of Banks -198 64887 13,959 19,753 20,479 -9,511 MONEY SUPPLY 7,346 31,245 43,333 36,534 20,244 8,621 (percentage increase during period) Percentage increase in: Bank Credit 19 42 29 27 18 13 to: Private Sector 18 32 21 35 25 19 to: Public Sector 22 59 40 16 10 4 Money Supply 12 46 44 26 14 5 Source: Central Bank. Table 24: Bank Cre dit, byOrigin and Destination, 1956-1961 1956 1957 1958 -1959 1960 1960 1961 (millions of pesos autstanding at end of period) September Cent ral Bank 108,430 51 81 109, 583 l2,862 104,77 1 30,6 Central Governnent 4,470 .13,900 j960 84,091 6870j 1 100,042 Loans and Investments 4,994 35,242 54,040 84,192 96,878 91,405 100,051 Less: Deposits -524 -1,342 -80 -101 -8 -14 -9 Re st of Public Sector 367 __ _Q1 54 6q2 ___åj8 __ 725 24?5 Loans and Investments 373 446 593 7:34 799 805 344 Less: Deposits -6 -5 -39 -45 -316 -80 -99 Banks 10,597 2221 24,80 2509 12,622 30,019 Advances and Rediscounts 103,593 3l,958 41,670 44,077 44,509 44,395 385 Less: Deposits -- -12,782 -14,449 -19,274 -16,040 -31,733 -16,366 Cormercial Banks 34,9Q3 15,60 29056 37,87 -7. 38_6 79,277 Central Government 2,347 5,803 126 14,72 _1,7 _16 lå 15,978 Loans and Investments 7,181 7,658 15,361 16, 688 18,755 19,000 19,228 Less: Deposits -4,834 -1,855 -2,744 -1,716 -2,382 -2,816 -3,250 Rest of Public Sedtor -14516 -12,262 -16L2? -25,801 -26.3W3 -37,19L -8886 Loans and Investments 25,845 .3,439 4,590 2,937 4,763 3,955 6,348 Less: Deposits -11,329 -15,701 -20,809 -28,736 -41,146 -41,146 -45,236 Private Sector 18,040 22,069 22½8 -48,700 _7,390 _67,707Z 102,187 Loans and Investiments 45,704 53,030 74,383 95,403 140,706 126,935 174,066 Less: Time Deposits -27,664 -30,961 -41,635 -46,703 -63,316 -59,228 -71,,879 Mortgage Banks 24,030 29,003 l32= -35,3,3 _25,700 -5,560 _22i_11 Loans and Investments 24,084 29,076 33,874 36,169 37,096 36,853 37,618 Less: Tine Deposits -54 -73 --139 -826 -1,396 -1,293 -1,707 Total Net Credit 612L4,376 215475 to: Central Government 6,817 39,703 66,577 99,063 113,243 107,575 116,020 Rest of Public Sector 14,883 -1L,821 -15,755 -25,112 -35,900 -36,466 -38,643 Private Sector 42,070 51,072 66,483 84,043 113,090 103,267 138,098 (millions of pesos increase durirg period) J1anuary-Septembeher Total Net Credit 15,184 8 35l 40,689 416,38 2502 to: Central Government 32,886 26,874 32,42 14,180 8,512 2,777 Rest of Public Sector -26,704 -3,934 -9,357 -10,788 -11,354 -2,743 Private Sector 9,002 15,411 17,560 29,047 19,224 25,008 Source: Central Bank, Tabe 2;: Index oi wLIolesale Prices o Duomestic Products, 195-76" General Farm products Industrial index All farm products Agriculture Livestock produets (Jan.-Dec. 1956 100) 1957 - December 134 151 105 134 134 990 33 255 211 1959 - December 438 433 609 482 421 16- Diecelbler 4 6L4 24 54572 .LU.L - January 44~) L44 846 42 - February 452 4h3 570 475 43 - Iarch 45 4c9 656 "44 u - April 454 428 537 460 451 - May 461 440 519 474 456 - June 469 461 512 484 463 - July 481 502 529 508 470 - August 493 522 568 530 476 - September-1 96 :f28 576 533 "0 - October/l 504 537 615 554 482 (Percentage increase during year) i958 rC6 23 9n n 1959 96 89 80 89 96 1960 1 7 -11 -l _Lyou In L -L-L -1 1, 1961/2 17 19 15 19 15 1 Estimated on basis of indexes of wholesale prices in ueno s Aires. 2 At January-October rate. Source: National Statistical Office, Central Bank. Table 26: Balance of International Payments, 1958-1961 (millions of U.S. dollars) 1958 1959 1960 1961 (estimate) Expores, mainly .o.b. 993.9 >,7uou 1,09.2 993.2 Imports, mainly c.i.f. -1,232.6 -993.0 -1,249.3 -1,119.8 -238.7 16,o -170.0 -428.6 Services and Donations (net) -20.6 -5.0 -34.2 -11lf8 Balance -259.3 11.0 -204.3 -5h3. C,-;± + -c~1 '7L 1 IA . oi .Ap 4 Long-ter:T 119.3 92.9 3T-T 4U, Short-term -74.2 -17,8 -18.0 12.3 Use of Central Bank's Net Foreign Assets 214.2 -86.1 -175.7 5__8 Increase in liabilities 23.4 160.6 142.1 -91.5 Decrease in Gold and Exchange 190.8 -246.7 -317,8 146.3 25)9.3 -11.0 2o4.35)43. /1 Including trade credits. /2 Including errors and omissions. Source: International Monetary Fund. Table 27: Export by Value and Volume, 1951-1961 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961L. (millions of U.S. dollars) VALUE Livestock Products M26 38 86 'O9 Meat 155 122 1'55 1 206 244 259 298 259 219 Wool 176 120 187 121 124 124 117 99 121 145 Hides 110 82 75 62 55 66 60 59 70 70 22 29 30 35 35 30 25 43 48 Cther2 63 47 41 39 28 35 34 28 28 38 Agricultural Products 2 '2 38 Wheat 201 6 244 205 246 155 159 126 135 143 Corn 28 67 75 117 23 63 45 82 124 124 Linseed Oil /1 L l1 29 19 33 39 42 41 Other Vegetable Oilis 1 6 13 28 36 10 32 Otherd 35 179 256 256 120 135 141 158 134 169 Other Exports" LO _6 6< A Wk Total 1.J 68_ 5 22 _og 27 25 1,009 11-02 2 (thousands of metric tons) VOLUM8E Livestock Products 752 ý10 80 )8 1,173 1.190 l 206 1L,138 1 Meat 294 239 29 284 397 58:2 60 5~5 538 438 460 Wool 60 106 155 98 109 109 88 105 141 140 163 Hides 129 163 151 144 168 2C4 202 201 198 167 Dairy roducts 29 25 60 54 6,6 68 66 57 91 100 OtherL/p 243 180 168 157 136 210 224 188 170 209 Agricultural Products 4L1 &02 6.258 8A7 6 72 5.875 6,245 .14 7,618 1 Wheat 2,455 9 2,527 2,943 3,617 2,526 2,66() 2,113 2,399 2,486 1,180 Corn 298 652 1,083 2,185 362 1,065 78<? 1,679 2,686 2,570 1,645 Linseed Oil /1 /i 11 156 61 141 162 218 169 276 Other Vegetable Oils 2l 1 13 30 75 130 30 99 210 Othe rdi 1, 2 1,388 2,648 1, 622 2,193 2,580 3,05 2, 285 2,659 Other Exportszk 318 22 l5 M éQ D, 210 i_9-2 Total 5 -3J2 7286 990 6 8 7,279 7,7T 8,5 8, 2,3 1 Included in "other agricultural products". Live animals and animal by-products. Mainly other cereals, cereal products, fruit and vegetables. Mainly forest products and manufactured products. Annual rates determined by comparing January-September data for 1960 and 1961. Source: National Statistical Office. Central Bank. International Monetary Fund. Table 28: IrCrts, ty Value and Tolone, 19C1-1960 1951 1952 1953 1954 1955 1956 1957 1958 1959 196C VALUE (millions of U.S. dollars, c.i.f.) Machinery and parts 218 175 185 172 132 178 141 197 174 C 403 Vehicles and parts /1 /1 1 / 83 132 194 127 00 131 Iron, steel and products 220 148 64 151 186 161 162 217 194 204 Non-ferrous metals and products 96 55 39 52 78 65 79 57 51 59 Fuels and lubricants 220 248 194 181 203 251 318 251 211 156 Chemicals and pharmaceuticals 115 58 50 89 91 78 96 77 72 62 Rubber and products 33 18 14 12 29 17 27 24 21 43 Wood and products 124 95 53 90 137 82 101 95 55 47 Textiles 137 106 68 63 48 26 50 36 40 39 Paper and cardboard 63 67 8 14 29 27 35 34 25 30 Foods, beverages, tobacco 70 79 67 101 83 80 70 83 35 40 Others 185 131 54 55 75 77 65 34 28 35 Total 1480 1179 795 979 1173 1128 1310 1233 993 1249 VOLUME (thousands of metric tons) Machinery and vehicles 181 157 170 133 187 194 223 208 217 385 iron, steel and products 1,032 579 369 1,102 1,479 967 988 :1511 1,08 1,718 Non-ferrous metals and products 191 111 76 108 166 172 197 156 152 161 Fuels and lubricants 7,945 8P61 7,274 7,706 8372 1051 10600 10456 9j621 6556 Chemicals and pharmaceuticals 337 202 124 207 291 286 307 288 324 203 Rubber and products 27 17 23 25 36 24 40 38 33 48 Wood and products 1963 639 524 795 :V045 757 956 933 606 593 Textiles 124 39 113 135 93 50 108 80 85 80 Paper and cardboard 197 162 34 58 127 118 158 178 140 171 Fcod, beverages, tobacco 211 423 223 248 270 274 288 409 280 300 Others 746 705 146 340 315 123 179 163 130 384 Total 12p52 11P95 9,076 10,856 12,380 139p16 L044 14J420 13,095 10,599 ,1 Included in "machinery and parts". Source: National 'tatisti-s Office, Internat.ional Monetary Fund. Table 29: Indexes of Exort and Imort Prices, 1951-1960 (1953 100; indexes of prices in U.S. dollars) 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 All exports 120 105 100 90 87 78 76 73 75 79 Wheat 85 98 100 72 71 64 62 62 59 60 Corn 138 148 100 77 93 86 81 70 67 70 Chilled beef 79 80 100 101 95 75 72 83 94 99 Wcol 235 89 100 103 94 93 110 77 66 83 Hides 171 106 100 87 67 63 52 59 70 85 Linseed oil 168 198 100 76 84 140 104 108 88 108 All imports 108 119 100 93 94 97 102 90 85 87 Source: International Monetary Fund. Table 30: Official Gold and Foreign Exchange Reserves, 1958-1961 (millions of U.S. dollars) Total Gold and End of Period Gold Convertible Convertible Net Bilateral Gross Currencies Currencies Balances Reserves J.958 59.5 36.4 95,9 37.1 133.0 1959 56.1 219.7 275.8 103.9 379.7 1960 March 55.6 339.5 395.1 118.6 513.7 June 55.0 398.4 453.4 143.5 596.9 Sept. 84.3 451.7 536.0 161.0 697.0 Dec. 193.5 42147 525.2 172.3 697.5 1961 March 187.6 401.5 58991 150.6 739.7 June 191.8 313.2 505.0 138.6 643.6 Sept. 190.8 287.2 478.0 122.8 600 8 Oct. 190.5 241,1 431.6 123.4 555.0 Nov. 190.5 207.4 397.9 117.2 515.0 Source: International Monetary Fundj Central Bank.