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Economic Model of Argentina

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Argentina is a free enterprise economy, having a strong reserve of around $50billion. It is the 3rd largest economy of Latin America. It is an emerging economy that benefits from Agriculture and Manufacturing. Being a part of the G20 countries, the economy of Argentina is dependant on its natural resources. The argentine economy rests on its exports and its manufacturing and industrial sector. A major portion of its labor force is a part of commerce and manufacturing and also agriculture. The country has started to increase taxes in order to decrease reliance on debt and remove fiscal imbalance.

Zinc and Copper deposits have been found in the Northwest allowing for a mining sector as well. The country has transitioned into a flexible exchange rate regime and expansionary fiscal and monetary policies. Privatization in many sectors and regulation has somewhat allowed the country to benefit and grow in the long run.   (Garcia)Argentina would need to target inflation along with some tightening of the fiscal policies to remain on its growth path in the long run. The extremely high level of subsidies would need to be readjusted since a large amount is being paid in the context.

Argentina has discontinued a number of foreign loans and debts which signal a positive sign. The country paid off the IMF in full in 2006 and has not borrowed from it since. Argentina continues to cut state spending. The high levels of government subsidies continue to be alarming and are not sustainable for the country’ s future. The country is using up supplies of its oil and gas and would need to slowly decrease the level of subsidies in public utilities and infrastructure to sustain any impact on growth.

Also, measures need to be taken to ensure geographical dispersion with respect to building infrastructure. If the unemployment numbers are kept in check and better infrastructure is provided to industrial zones the country would become the best economy in South America.

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