Publication: Argentina Country Economic Memorandum: A New Growth Horizon - Improve Fiscal Policy, Open Markets, and Invest in Human Capital
Loading...
Published
2024-06-20
ISSN
Date
2024-06-20
Author(s)
Editor(s)
Abstract
Argentina’s production capabilities, characterized by its abundant natural capital assets and well-educated workforce, have the potential to drive sustained and inclusive economic growth. Argentina is home to diverse natural resources, including the world’s second-largest deposits of lithium, and the second-largest gas shale and fourth-largest shale oil reserves. Its fertile land makes it a major agricultural producer, ranking third in soybean production worldwide. Human capital is rooted in its historically high-quality education and health services, as well as notable achievements in knowledge-intensive sectors such as research and innovation. This report identifies three key constraints to sustaining growth in Argentina. First and foremost, macroeconomic volatility is largely responsible for poor growth outcomes: high policy uncertainty and fiscal procyclicality have contributed to a cycle of booms and crashes. Volatility is also driven by an increasing overreliance on primary commodities. Stubborn and high inflation in addition to abrupt changes in exchange rates reduce planning horizons for long-term investment and impede the development of capital markets. Second, restrictive trade policies, in place partly because of macroeconomic imbalances, prevent Argentina from leveraging its vast comparative advantages to reap the benefits of international trade. Third, while human capital is among Argentina’s greatest assets, its quality is gradually declining. Without corrective policies, the skills of the country’s workforce could fall rapidly behind those demanded by a dynamic, technology-driven, knowledge-intensive global economy.
Link to Data Set
Citation
“World Bank Group. 2024. Argentina Country Economic Memorandum: A New Growth Horizon - Improve Fiscal Policy, Open Markets, and Invest in Human Capital. © World Bank. http://hdl.handle.net/10986/41740 License: CC BY-NC 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
Publication Equatorial Guinea Country Economic Memorandum(Washington, DC: World Bank, 2025-03-12)The focus of this Country Economic Memorandum (CEM) is to review key policy and reform options for Equatorial Guinea to build the foundations for renewed, diversified, and more inclusive growth. The CEM thus aims to contribute to the government’s economic development and diversification agendas. The first chapter of the report examines the drivers of past growth, and the country’s asset portfolio, and discusses possible long-term growth trajectories. The second chapter examines fiscal policy as the main instrument for efficient transformation of natural capital into physical and human capital, and outlines the fiscal challenges associated with the reliance on the volatile oil and gas markets. It identifies the key gaps in public financial management, including the challenges posed by climate change and provides reform options for implementing an effective fiscal policy. The third chapter explores the present state of education, health, and social protection and discusses priority options to boost human capital. The fourth chapter then turns to the private sector and the main cross-cutting issues that need to be addressed to encourage higher investment, innovation, and productivity. The final chapter drills down into some key sectors which are likely to play a prominent role in any new growth strategy. These include digitalization in both the public and private sectors, and integration into the world economy through trade and ecotourism.Publication Angola Country Economic Memorandum, July 2025: Moving Beyond Oil - Laying the Foundations for Growth and Jobs(Washington, DC: World Bank, 2025-07-28)This Angola Country Economic Memorandum (CEM) analyzes the country’s economic growth over the past two decades and offers insights into its long-term potential. The aim is to identify the main challenges, opportunities, and policy reforms necessary for fostering a more resilient, inclusive, and sustainable growth path. Therefore, this CEM serves as a diagnostic tool to support Angola’s policymakers in advancing the economic diversification agenda outlined in the National Development Plan (NDP) 2023-2027 and the long-term vision. The Angolan economy is gradually transitioning from an oil-based growth model. Angola has implemented a series of reforms to restore macroeconomic stability and promote economic diversification. The extractive nature of Angola’s institutions has contributed to poor economic transformation and inclusion. In this context, transforming and diversifying the economy to create jobs is key to unleashing the country’s potential. This will also reduce poverty and greater resilience to a variety of shocks. In particular, the development of the Lobito Corridor has the potential to accelerate economic diversification in Angola and promote regional integration. Overall, Angola’s current growth model faces three interrelated challenges, each of which represents a loss in potential welfare and thereby an opportunity for reform. These challenges include: (i) recurrent macroeconomic instability; (ii) negative productivity growth; and (iii) low and underutilized physical and human capital. This CEM offers a roadmap to address these challenges and shift Angola toward a more sustainable and inclusive growth model. Such a model makes better use of the country’s existing resources while also laying the foundation for future prosperity.Publication Guatemala Economic DNA : Harnessing Growth with a Special Focus on Jobs(Guatemala, 2014-08)This is the first edition of the of the Guatemala Economic DNA (Diagnostic for National Action) with a focus section on job creation. The report highlights the important achievements of Guatemala on the macroeconomic stability front. It also argues that these achievements will need to be secured and makes the case for an increased focus on accelerating economic growth. For example, this edition highlights that in 2013 the country's economic activity expanded by 3.7 percent in 2013, and is projected to grow around 3.6 percent in the near-term, in line with the growth of Central American economies but below the growth rate in emerging markets. Meanwhile, inflation has been managed and the authorities deserve to be recognized for their commitment to maintain macroeconomic stability. Guatemala's economy has recovered at a modest but consistent pace since the global financial crisis of 2008-09. Guatemala's macroeconomic resilience is due to prudent macroeconomic policies and a more diversified economy in comparison to other Central American countries, which has helped cushion the impact of shocks. Accelerating growth can substantially reduce poverty in Guatemala, but this will require improvements in economy-wide productivity. Public investment is essential to achieving Guatemala's development goals, yet it remains tightly constrained by a lack of resources, and the government continues to collect the lowest share of public revenues in the world relative to the size of its economy. This report, underscores the extent to which structural constraints on enterprise development slow hiring rates, discourage technology transfer, and promote informality. Several cross-cutting factors are also closely correlated with job creation in Guatemala, including financial depth, exposure to corruption, and informality. Strengthening the rule of law and streamlining regulatory systems will be essential to facilitating firm growth, fostering greater competitiveness, and boosting the returns to both labor and capital.Publication Colombia : Country Economic Memorandum, The Foundations for Competitiveness(Washington, DC, 2005-11)Since Colombia's last Country Economic Memorandum (CEM) (1989) the country has endured several years of slow growth, burgeoning fiscal deficits, and high levels of debt. Colombia now is seeking to join a free trade agreement (FTA) with the United States in the hope of stimulating growth and improving living conditions for the country as a whole. In response to the opportunities and challenges presented by the proposed FTA with the United States, the Colombian government has launched an "internal agenda," an action plan that involves major stakeholders -- public sector, private sector, and regional government -- aimed at obtaining greater levels of competitiveness. The government has articulated the need for greater understanding of the impact of the proposed FTA, and a strategy for a reform agenda that would enable the country to capture the potential benefits from freer trade and facilitate the transition to greater openness. This report is produced as an input into Colombia's reform agenda. It starts with an executive summary and policy report which presents the main findings and key policy recommendations of the three chapters comprising the report. Chapter 1 evaluates Colombia's business and growth environment and the likely challenges the manufacturing sector will face in taking advantage of the FTA with the United States. The chapter consists of three sections. Section I uses detailed survey data to identify the top constraints on growth and competitiveness of Colombian firms. Section 2 analyzes key developments in the manufacturing sector following the trade liberalization of 1990-91 using micro-level data, and highlights areas where reforms are needed. Section 3 examines the challenges and opportunities faced by small and medium-sized businesses in confronting a more open trading environment. Chapter 2 builds on the microeconomic issues raised in the first chapter, and follows with an evaluation of macroeconomic and fiscal (tax and expenditure) policies that are important for making the Colombian economy competitive. In this context, the study also evaluates the sustainability and trajectory of public debt. Finally, Chapter 3 examines the likely impact of agricultural liberalization on income distribution in the country under the proposed Colombian-U.S. FTA -- identifying who are the likely gainers and losers -- and assesses its impact on economic growth and poverty in the country.Publication Georgia Sustaining Rapid Economic Growth : Country Economic Memorandum(Washington, DC, 2013-07)Sustaining rapid economic growth for reduced poverty and shared prosperity over the next decade and beyond in Georgia is an important goal and a key challenge for the authorities. While the record of growth over the last decade has been strong, the forces that drove this growth are unlikely to be sustained in the coming years. Sustaining strong growth in Georgia going forward will require new policies that help support both high investment financed increasingly from domestic sources as well as sustained rapid productivity growth in the tradable sectors. Ensuring a more sustainable source of financing for investment and accumulation will require raising low rates of national savings in Georgia. Sustaining rapid productivity growth of tradables will require reforms to address firm level constraints to improved allocative efficiency and productivity over the firm lifecycle. Supporting productivity growth will also require improved skills and deployment of workers that will also support employment generation and more inclusive growth going forward. Expanding productivity and growth of exports will require ensuring price competitiveness, enhancing market access, and improving logistics infrastructure. This report is structured in five chapters. Chapter one looks at the sources and prospects for growth, the record on national savings, and the prospects for raising savings. Chapter two is a diagnostic of the dynamics of firm-level productivity growth and the policies that may be constraining improved allocative efficiency and lifecycle productivity. Chapter three looks at employment and skills to assess whether Georgia's labor resources are adequately deployed. Chapter four is a diagnostic of exports and international trade and the policies that may be holding back growth and productivity of the export and tradable sectors in particular. Two appendices on the apparel and wine industries provide additional insight into policies to support export growth.
Users also downloaded
Showing related downloaded files
Publication Gabon Country Climate and Development Report(Washington, DC: World Bank, 2025-11-01)Gabon has a unique opportunity to drive inclusive growth, reduce poverty, and build a resilient post-oil economy, with climate action accelerating progress toward these goals. The country’s main development challenge is achieving higher growth and poverty reduction, as stronger growth is needed regardless of projected climate shocks to create jobs, raise living standards, and enable a viable post-oil economy. While pursuing growth-promoting economic reforms, climate action that prioritizes people must remain central to its development pathway. However, climate change risks exacerbating poverty and regional inequalities in a country already facing long-term challenges in expanding economic opportunities and basic public services, especially in rural areas. Climate shifts compound these challenges, making stronger private sector-led growth driven by reforms essential for resilience, diversification, job creation, and poverty reduction, though targeted investments in adaptation will still be required to mitigate climate shocks. Using a whole-of-economy approach, the Gabon Country Climate Development Report (CCDR) estimates that climate change impacts could result in GDP losses of 3.5 to 5.3 percent per year through 2050 compared to a business-as-usual baseline trajectory.Publication Guinea-Bissau Country Climate and Development Report(Washington, DC: World Bank, 2024-10-23)Guinea-Bissau is endowed with a wealth of natural resources, with the highest natural capital per capita in West Africa (US3,874 dollars per capita), which could be leveraged for sustainable and resilient growth. However, Guinea-Bissau faces significant development hurdles, such as high poverty rates, political instability, and economic challenges, including an over-reliance on cashew nuts. Rural poverty has increased, and the nation's infrastructure, education, and health care systems are underdeveloped. Climate change poses a severe threat, potentially impacting agriculture, fisheries, and infrastructure. Without adaptation, it could lead to a significant cut in real GDP per capita (minus 7.3 percent by 2050) and increase in poverty (with up to over 200,000 additional poor by 2050, that is, 5 percent of the expected population, in the worst scenario). The country's low greenhouse gas emissions are expected to rise, mainly due to agriculture and land-use changes, with deforestation being a major contributing factor. Although Guinea-Bissau is a low emitter, it has high mitigation ambitions, targeting a 30 percent reduction in greenhouse gas emissions by 2030. The Nationally Determined Contribution outlines significant climate actions, with initiatives focused on forest conservation, sustainable agriculture, and community development. However, the country's political instability, institutional weaknesses, and limited financial resources pose challenges to implementing these climate commitments, which depend heavily on external funding. The financial sector's underdevelopment and vulnerability to external shocks limit its ability to support green investments, though reforms could enhance resilience. Guinea-Bissau must consider its climate financing as development financing and vice-versa, engage the private sector, and integrate climate goals with national development plans to ensure a sustainable future. Concessional climate financing is vital due to the underdeveloped financial sector and the government’s limited borrowing capacity. Addressing Guinea-Bissau's vulnerability to climate change and its structural issues requires a cohesive approach that integrates development and climate strategies. This could involve improving governance, diversifying the economy, protecting natural capital, developing human capital, and investing in sustainable agriculture and infrastructure. The transition to a more sustainable and inclusive development pathway that supports economic growth is possible, but requires focusing on key strategic sectors, enhancing institutional capacity, and creating the conditions to mobilize finance. As a highly vulnerable country, there are myriad needs in the different sectors; however, to be more efficient and effective, Guinea-Bissau should prioritize actions in a few sectors, especially actions on biodiversity, agriculture, and social protection. Low carbon development, especially in energy and forestry sectors, could provide cost-efficient solutions and attract climate finance, including from the private sector, which will support the overall development agenda.Publication Comoros Country Climate and Development Report(Washington, DC: World Bank, 2025-06-18)The Union of the Comoros (The Comoros) has significant vulnerability to climate change-related risks but has considerable opportunities to strengthen preparedness and resilience against these challenges. According to the Notre Dame Global Adaptation Index, the Comoros is the 29th-most vulnerable country to climate change and the 163rd most ready to adapt (out of 191). The Comoros archipelago is exposed to many natural hazards that adversely affect the country’s natural capital, people, and physical infrastructure. In 2014, the economic cost of climate-related disasters was estimated at 5.7 million dollars annually, equivalent to 9.2 percent of Gross Domestic Product (GDP). Between 2018 and 2023, as many as 11 tropical depressions or cyclones impacted the country, with Cyclone Kenneth causing the greatest damage, equivalent to 14 percent of GDP, resulting in total economic growth falling from 3.6 percent in 2018 to 1.9 percent in 2019. More than 345,000 people (40 percent of the population) were affected by the cyclone, with 185,000 people experiencing severe impacts and 12,000 people displaced. However, there is an opportunity for the country to grow more robust and shock-responsive, and to establish pre-positioned funding mechanisms to enhance future crisis response efforts. For the Comoros, adaptation and climate-resilient development are the key climate change focus areas, with the country projected to face 836 million dollars 2050 in additional costs due to climate-related impacts. Current plans to adapt to the impacts of climate change in the Comoros include efforts to improve water management, strengthen coastal protection, and develop climate-smart agriculture practices. Given the country’s reliance on its natural resource base for economic growth and mobility, protection of these resources from climate change will be essential for promoting resilient growth and development. In addition to growing the adaptive capacity of the country’s natural resource sectors, strategic economic diversification will be important to help minimize future climate impacts, and development activities will need to be undertaken in such a way as to attract low-carbon co-benefits. The Union of the Comoros is committed to addressing climate change through its Nationally Determined Contribution (NDC) and national priorities. The country’s NDC (which was revised in 2021 for a ten-year horizon) sets ambitious targets, with a goal of reducing greenhouse gas emissions by 23 percent by 2030. The country also plans to significantly increase the share of renewable energy in its energy portfolio, reaching 33 MW by 2030. This will not only promote low-carbon development but also reduce the country’s dependency on imported oil and coal, which currently make up 95 percent of the energy mix. Additionally, the Comoros has declared its intention to increase CO2 removals by 47 percent by 2030, compared to BAU.Publication Kyrgyz Republic Country Climate and Development Report(Washington, DC: World Bank, 2025-11-03)This Country Climate and Development Report (CCDR) on the Kyrgyz Republic aims to support the country’s development goals amid a changing climate. The CCDR considers two policy scenarios up to 2050: the business-as-usual (BAU) and high-growth scenarios. As it quantifies the likely impacts of climate change on the Kyrgyz economy between now and 2050, the report highlights key government actions to best prepare for and adapt to climate impacts (referred to as “with adaptation” measures), with a particular focus on the time horizon up to 2030. The CCDR also outlines a path to net zero emissions by 2050 (referred to as “with mitigation” measures, “decarbonization,” or, simply, “net zero 2050”), highlighting associated development co-benefits.Publication Jobs in a Changing Climate: Insights from World Bank Group Country Climate and Development Reports Covering 93 Economies(Washington, DC: World Bank, 2025-11-05)The World Bank Group’s Country Climate and Development Reports (CCDRs) provide a crosscutting look at how countries’ development prospects, and the job opportunities they offer to their people, can be threatened by climate impacts and supported by climate policies. Climate change and policies affect jobs through impacts on productivity, energy and material efficiency, and physical, human, and natural capital. They can also transform employment opportunities, especially through complementary measures that help workers and firms adapt to and benefit from new technologies and production practices. Prepared by the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), CCDRs integrate country perspectives, climate science and economic modeling, private sector information, and policy analysis to assess how countries can successfully grow and develop their economies and create jobs despite increasing climate risks and while achieving their climate objectives and commitments. Each CCDR starts from the country’s development priorities, opportunities, and challenges, and is developed in close consultation with governments, businesses, and civil society, ensuring the recommendations reflect national priorities. By combining evidence on adaptation, resilience, and emissions pathways, CCDRs highlight where climate action can reinforce development and job creation, and where targeted policies are needed to manage risks and smooth labor market transitions. Taken together, these elements can help create local jobs, ensure economic transitions are just and inclusive, and equip workers and firms to navigate the disruptions and opportunities of a changing climate and changing technologies.