World Economy

Argentina Finally Escapes Recession

Argentina Finally Escapes RecessionArgentina Finally Escapes Recession

Argentina seems to have escaped its recession, with the country’s national statistics agency reporting that the economy grew by 0.3% in the first quarter of this year compared to the same period last year.

The agency’s numbers are credible and reliable, say international financial analysts, adding that the government of Mauricio Macri revamped the statistics agency last year, news outlets reported.

This is the first credible information that confirms that Argentina’s economy is growing after Macri began implementing sweeping reforms to increase confidence in his country’s economy and make it more market-friendly.

Considering the International Monetary Fund report issued late last year, Argentina’s GDP will grow 3% in 2017. In its recent report, the Universidad Torcuato Di Tella says there is little chance of Argentina falling back into recession.

Today, financial, construction, and agricultural sectors are driving the growth, but the IMF says foreign investment and exports would stoke tremendous growth in the months to come.

The economy suffered a contraction of more than 2% last year, but foreign investment is now rising like never before and inflation has almost halved from a high of around 40%.

Argentina sold $16 billion worth of bonds this year, ending a decade of isolation from international credit.

Foreign investment could pick up this year if Macri’s Pro party does well in the October election. A strong show of support for the ruling coalition will enable the government to press on with more economic reform programs, including a tax reform aimed at improving competitiveness.

Argentina’s technological prowess is spreading across all sectors, but the agricultural industry is driving an upsurge of new agritech startups with a focus on innovation in the sector.

The country possesses one of the top ten highest amounts of agricultural land in the world, at nearly 1.5 million square kilometers, leading to an important necessity and strong demand for industry-supporting tech.

Interestingly, the US is the most important market for Argentina’s agritech developments, with most agritech companies already selling to the US market or planning to do so in the near future, according to Vanesa Kolodziej, Acceleration Manager at Xpand Ventures.

“Brazil constitutes a natural partner and China an inspirational market, but the US is the real validation market,” said Kolodziej. “Even so, while investment is pouring globally into the sector, especially from the bigger firms such as Monsanto, those investments have not yet spread to Argentina. This gives local players the chance to be pioneers.”

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