Argentina

The Republic of Argentina is located in South America, approximately between latitudes 23°S (Tropic of Capricorn) and 55°S (Cape Horn). The Andes separates the country from Chile in the west, and it borders Bolivia and Paraguay in the north and Brazil, Uruguay, and the South Atlantic Ocean to the east.

Argentina's population and culture were heavily shaped by immigrants from all over Europe, but particularly from Italy and Spain, which provided the largest percentage of newcomers from 1860 to 1930. The Republic of Argentina is made up of 23 provinces plus the Autonomous City of Buenos Aires, its capital. The official language of Argentina is Spanish, and the currency is the peso (ARS). Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base.

On December 10, 2023, Javier Milei took office as the new president of Argentina, with the intention of restoring the macroeconomic balance. The new administration and its policies would set the course for 2024.

One of the first measures implemented was the official exchange rate devaluation. The Argentine peso was depreciated as against the US dollar, from ARS 366.5/USD 1 to ARS 800/USD 1.

The first months of 2024 were affected by the measures adopted at the end of 2023. The deregulation of some prices in the economy, along with the consequent pass-through of the exchange rate depreciation, impacted on the CPI, with a monthly inflation rate of 25.5% in December 2023 and 20.6% in January 2024. A variation of this magnitude has not been recorded since 1991.

As from the second quarter of 2024, the economic program started to bear fruit in the financial system. In April 2024, the gap between the MEP dollar and the official dollar stood at around 16%, its the lowest rate since the end of 2019, whereas the country risk decreased to 1,143 basis points. Likewise, inflation started to slow down rapidly. In April, the monthly variation of the CPI was 8.8%; however, this index stood at 4.2% and 4.6% in May and June, respectively.

At the same time, the BCRA continued its process of reducing the monetary policy rate started in December 2023, which went from 80% at the beginning of April to 40% at the end of June. This measure, which allowed to reduce the issuance of pesos due to BCRA's interest-bearing liabilities, also lowered implicit yields in dollars involved in carry trade activities. This led to a dollarization of assets that exerted an upward pressure on alternative exchange rates. Consequently, the foreign exchange gap started to widen again, reaching an average of 42.1% in June, and the BCRA recorded foreign currency sales amounting to USD 46.6 million in the same month.

Parallel to this, the law "Bases and Starting Points for the Freedom of the Argentines" was approved by Congress in mid-2024, after several discussions and amendments. This law includes deregulations and the repeal of laws and sectoral economic regimes, as well as amendments to labor laws, among others. This law provides for the Incentive Regime for Large Investments, known as RIGI, which establishes a series of tax, foreign exchange, and customs incentives aimed primarily at providing a framework of stability, predictability, and legal certainty to encourage long-term investments in the country.

Looking ahead to 2025, the international context has become more complex. The changes in the United States’ tariff policy —whose continuity or stability over time is uncertain— resulted in an increased volatility in the financial markets and may also lead to a resurgence of inflationary pressures and could impact on the economy, both in the United States and worldwide.

Despite this context of greater uncertainty, Argentina reached a new agreement with the IMF in April 2025. As from April 14, the initial disbursement, which amounted to USD 12 billion, facilitated the transition to a floating system among bands and the removal of all restrictions to operate in the exchange market. These restrictions were fully eliminated for individuals and largely lifted for legal entities.

After the implementation of the new system, the peso positioned itself within the band, that is, it devalued compared to the official exchange rate, but it appreciated in relation to financial exchange rates, which rapidly converge to levels near the official exchange rate. The Argentine currency experienced a modest increase in value in the following days. Although it is premature to forecast the value at which the exchange rate will stabilize, the economy’s fundamentals allow certain degree of optimism. However, the challenge is considerable, especially in a year of legislative elections, where the uncertainty inherent in that process may lead to an increase in volatility.  

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PwC Argentina

PwC Argentina has a staff of more than 6,200 professionals, made up of accountants, lawyers, graduates in economics, and international trade management. PwC provides a multidisciplinary and coordinated approach to create integrated solutions tailored to the client’s needs.