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Beneath Argentina's growth, economic fault lines simmer

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Natacha Pisarenko/AP

(Read caption) China's Premier Wen Jiabao, left, and Argentine President Cristina Fernandez pose for a picture after signing bi-lateral agreements at the government house in Buenos Aires, Argentina, Monday, June 25.

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A version of this post ran on the author's blog, The views expressed are the author's own.

To the untrained eye, Argentina’s economic future might seem bullish. Under current President Cristina Fernández de Kirchner, an average annual growth rate of 7 percent has been impressive, and is lower than that of only one other government in Argentine history. Positive external forces have been working in the nation’s favor in recent years: new agricultural technology has allowed increases in production and output; the rise of China and India have simultaneously fueled demand for its agricultural products and commodities; and most significantly, since 2003-4, high prices for these products have improved Argentina’s terms of trade. Brazil has become Argentina’s top trading partner, and that relationship will continue to be fruitful for Argentina as Brazil’s prosperity boosts its own.


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