Following years of unsustainable economic policies, Argentina has undertaken ambitious reforms. Further wide-ranging structural reforms are needed to respond to challenges still lying ahead. Protecting the poor and ensuring that growth is inclusive and sustainable are key priorities.

1. Internet: oe.cd/20d
OECD
OECD Economics
2017
MULTIDIMENSIONAL ECONOMIC
SURVEY OF ARGENTINA
Towards a more prosperous and
inclusive Argentina
Buenos Aires, July 2017

2. 2
Main messages
• Following years of unsustainable economic policies,
Argentina has undertaken ambitious reforms.
• But the work is far from being finished. Many
challenges still lie ahead.

3. 3
Argentina has lost grounds in terms of incomes
Source: OECD calculations based on Bolt and Van Zanden (2014) (see http://www.ggdc.net/maddison/maddison-project/data.htm).

4. Poverty and inequality have fallen but
remain very high
Source: Encuesta Permanente de Hogares (EPH) 2016 and OECD Income Distribution Database (2016)

5. 5
Significant macroeconomic imbalances have built up:
Fiscal deficit
Source: CEIC, Datastream, Ministerio de Hacienda

6. 6
Significant macroeconomic imbalances have built up:
Inflation
1. Based on the Congress CPI, only for the greater Buenos Aires area.
Source: INDEC, Diputados del Congreso Indice Nacional

7. 7
Growth was not sustainable
Source: INDEC

8. 8
Further reforms will bring susbtantial benefits
Source: OECD computations.

9. 9
First challenge:
Ensuring sound and sustainable
macroeconomics

10. 10
Bringing down inflation will be challenging
Source: BCRA, CEIC.

11. 11
Public expenditure and taxes are high
Source: IMF World Economic Outlook database, October 2016.

12. 12
There is scope for reducing expenditures
Los subsidios están siendo
reducidos pero todavía
representan el 2.2% del PIB.
Source: OECD calculations, Ministerio de Hacienda, OECD/IDB/CIAT (2016), Taxing Wages and Taxing Wages in Latin America
and the Caribbean, OECD Publishing, Paris.

13. 13
The tax system is not very efficient
Income threshold where single taxpayers start paying income tax, as a multiple of the average wage
1. For India, the average worker income is for the organised manufacturing sector as reported in the Annual Survey of Industries.
Source: OECD calculations for Argentina (based on 2016 data), Brazil, China, India, Indonesia and South Africa; and OECD Taxing Wages 2016 for the rest of the countries;
OECD Government at a glance (2016).

14. 14
Key recommendations
Macroeconomic policies
 Reinforce the independence of the Central Bank by limiting the possibilities for
dismissal of the governor.
 Simplify the Central Bank’s mandate, prioritising price stability.
 Continue to to pursue planned fiscal targets.
 Phase out energy subsidies, rationalise public employment and achieve further
cost savings in state-owned enterprises.
 Undertake a revenue-neutral tax reform, including
 - Lowering the income threshold where taxpayers start paying personal income
taxes and ensuring a progressive rate schedule.
 - Introducing progressivity into social security contributions.
 - Phasing out the provincial turnover tax and financial transaction tax.

15. 15
Second challenge:
Raising productivity and living standards

16. 16
Investment and productivity growth have been low
Source: OECD and CEP (Centro de Estudios de la Productividad).

17. 17
Barriers to entrepreneurship are high and regulatory
procedures are complex
Source: OECD Product market regulation database

18. 18
More young firms and start-ups are needed
Source: OECD computations based on World Bank Enterprise survey database.

19. 19
Few companies are headed by female managers
Source: World Bank Enterprise survey database.

20. 20
Argentina is only sparsely integrated into the global
economy
Source: IMF International Financial Statistics; OECD Economic Outlook 100 database;

21. 21
Better training can help to find new jobs
Source: World Bank ASPIRE database and OECD Stats. Data pertain to 2014 or latest available year.

22. 22
Key recommendations
Strengthening productivity and investment
 Simplify administrative procedures to start a company.
 Ensure that the competition authority has autonomy and adequate
resources.
 Lower import tariffs and further reduce the application of non-automatic
import licenses.
 Protect workers with unemployment insurance and training rather than
strict labour regulations.
 Develop the vocational education system
 Better align curriculums with labour market needs.
 Promote gender equity.

23. 23
Third challenge:
Reducing poverty and inequality

24. 24
Transfer programmes reduce poverty and inequality
Source: OECD estimates.

25. Half the population is poor or at risk of falling into
poverty, particularly children
Source: Encuesta Permanente de Hogares (EPH) 2016 ; OECD Income Distribution Database (2016)
0
5
10
15
20
25
30
Argentina LAC 9 OECD
% of population
Relative poverty by age group
Children (<18) Youths (18-25) Adults (26-65) Elderly (>65)
Poor 31%
At risk of falling
into poverty 20%
Middle Class
44%
Affluent 6%

26. 26
The sustainability of the pension system is at risk
Source: OECD Pensions at a glance, 2016.
Pension levels are high relative to working-age wages

27. 0
20
40
60
80
100
Poor At risk
of falling
into poverty
Middle
Class
Affluent
% Employment, 2016
Creating quality jobs is crucial for eliminating poverty
in a sustainable manner
Source: Encuesta Permanente de Hogares (EPH) 2016 and CEDLAC (2016).
0
5
10
15
20
25
30
35
40
45
GTM
HND
BRA
PER
NIC
MEX
PRY
COL
SLV
BOL
DOM
PAN
CRI
URY
ECU
ARG
CHL
Percentage point Gap in employment among adult and youth population, 2014
0
10
20
30
40
50
Poor At risk
of falling
into poverty
Middle
Class
Affluent
% of
employment Informality, 2016

28. 28
Female labour participation is low
Source: OECDstat, 2015, EPH (INDEC), 2016 for Argentina.

29. Improving access, quality and equity in the
education system is a priority
0
20
40
60
80
100
ISR
DEU
AUS
FRA
OECD
CHL
ITA
ARG
COL
ESP
BRA
TUR
MEX
% Education secondary
(population aged 25-34)
0
10
20
30
40
50
AUS
ISR
ESP
OECD
JPN
DEU
COL
CHL
TUR
MEX
ITA
ARG
% Education tertiary
(population aged 25-34)
Source : UNESCO (2016), OECD PISA (2016), OECD Education at a Glance (2016) y EPH 2016 (INDEC).
0
10
20
30
40
50
60
URY
MEX
BRA
LAC
CRI
COL
ARG
ESP
ISL
ITA
PRT
CHL
HUN
EST
EU
GBR
NOR
BEL
DEU
FRA
LUX
FIN
NLD
GRC
DNK
AUT
SWE
IRL
SVK
CZE
POL
CHE
SVN
% Young people (18- 24 aged) who did not finish the secondary, 2014

30. Improving skills brings short-term and long-term
benefits
0
20
40
60
80
FRA ESP ITA CRI AUT OECD MEX LAC DEU COL ISR ARG TUR JAP
% Percentage of firms identifying difficulty in filling jobs , 2016
Source: ManPower (2016), UNESCO (2016), y EPH 2016 (INDEC).
0
10
20
30
40
50
PER
BRA
CAN
COL
JPN
ARG
GRC
ESP
MEX
FRA
DEU
LAC
ISR
CHL
TUR
CRI
OECD
SWE
POL
AUS
ITA
AUT
CHE
FIN
NLD
% Percentage of secondary students enrolled in vocational education
2015

31. 31
Key recommendations
Reducing inequalities
 Integrate existing social protection programmes and allow them to share registries and
targeting tools.
 Index pension benefits to consumer prices and align retirement ages for women to
those for men.
 Merge teacher training institutions and strengthen their quality standards, governance,
accounting requirements and transparency.
 Strengthen mechanisms to identify and support students at risk of dropping out
through tutoring and individualised support..
 Expand early childhood education, promote flexible working time arrangements and
extend paternity leave.
 Lower social security contributions temporarily for low-paid workers whose jobs are
brought into the formal sector.
 Scale up training, employment services, and simplify administrative procedures to
start a company
 Enforce formalisation and compliance with more labour inspections.

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32
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