Argentina - Economic position and prospects

RESTRICTED Report No.WH-182a Ihis report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION ECONOMIC POSITION AND PROSPECTS OF ARGENTINA July 16, 1968 Western Hemisphere Department  CURRENCY EQUIVALENTS U.S. $1 = 350 pesos 1 peso (M$N) = U.S. $0. 00285 1 billion pesos = U.S. $2, 850, 000  TABLE OF COTENTS Page Number Basic Data Summary & Conclusions i I. Economic Policy and Performance, 1967-68 1 Performance in 1967 1 - The 1968 Program 3 II. The 1968 Public Investment Program 9 III. Development Problems and Prospects in the Major Sectors 12 Agriculture 12 Industry 23 Transport 29 Electric Power 37 Petroleum 40 Telephones 43 IV. Outlook for Public Investment and Finance 45 Investment Needs and Savings Requirements 45 Tax Structure and Adninistration 47 The Rationalization Program 51 Public Sector Borrowing 53 V. Development Prospects and the Balance of Payments Outlook 55 Growth Potential 55 Balance of Payments and Credit- worthiness 56 Statistical Appendix This report is based on the findings of a mission to Argentina in January-- February 1968 composed of Messrs. E. P. Wright (Chief), R. S. Dosik, J. de Weille, and Nathan Koenig (Consultant).  BASIC DATA 2 Area: 2.8 million km (1.1 million sq. miles) FPkulation (1967): 23,248,000 Growth Rate (1950/51-1965/66) 1.8 percent Gross Domestic Product (1966): M$N 5,231.2 million Real GrowTth Rate (1950/51-1965/66) 3.0 percent Per Cepita GDP $750 Origins of Gross Domestic Product (1967): Percent of GDP Industry 31% Agriculture 16% Commerce 15% Transport and Communication 6% Expenditure on Gross Domestic Product (1967): Percent of GDP Gross Fixed Investment 18.6% Private Consumption 67.5% Public Consumption 11.9% Current Account Balance 2.0% Cost of Living: Annual Average Percent Change 1964 21 1965 28.6% 1966 31.9% 1967 29.2 1968 (Jan.- Iiiy, seasonally adj.) 3.lv Mbney Supply: M$N, End of Period Percent Change L964 395 39.6% 1965 498 26.1% 1966 672 34.9% 1967 872 30.0% 1968 (March) 886 2.0%  National Public Sector Finances: Percent of GDP 1966 1967 National Government Current Revenue 10.2 13.8 Current Expenditure 10.0 10.3 Total Public Revenue (incl. social security) 16.2 20.1 Public Saving - 0.5 3.7 Public Investment 4.0 4.8 Belance of Payments ($million): 1965 1966 1967 Exports 1,493 1,593 1,465 Imports -1,198 -1,124 -1,096 Trade Balance 295 h69 369 Invisibles -111 -216 .189 Current Account Balance 184 253 180 Foreign Exchange Reserves ($ million): December A ril 1966 1967 1968 Assets, Central Bank 231 759 746 Net Position, Incl. Treasury Liabilities -154 279 293 Public Foreign Debt (June 30, 1967): $ million Outstanding, as reported by IBRD (excluding undisbursed) 1,851.9 Debt Service Ratio 27%  } \ N < 6 < 4/0 -_o Du ' / ~~~~~ odrejo-es ,4 / JUJU Y Eebo,c. / A ~ ~~ P,~chwol - i M A X~~~~~~- CA HUN1ICsO; A C d ~~~~~~~~~t SA TIAGO 3 V ree