Basic Keys To Consider When Stepping Into The Argentine Private Equity Arena

THE ARGENTINE ECONOMIC AND POLITICAL SCENARIO.

The Economy's Fundamentals. Argentina's GDP grew from 2003 to 2007 at annual rates higher than 8%, barely declining to around 7% in 2008¹. However, the global crisis accelerated the end of such impressive growth cycle, and the GDP's evolution for 2009 is expected to be close to cero². Meanwhile, the annual inflation level is in between 15 to 20 percent³, and the quotation of the U.S. dollar as of mid August 2009 is around Pesos 3.85 to the Dollar⁴. In this scenario, treasury reserves amount to approximately US$ 45,000,000,000⁵, which allows the government to maintain its grip for the time being. In any case, the economy's fundamentals remain adequate, with surpluses both on the fiscal and current accounts, even if threatened by the voracious rise in public expenditure.