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06/03/2024
Rodrigo Park
Head of Corporate Communications, Public Policy and Economic Research at Santander Argentina
Argentina is brimming with natural resources and tech talent.
Santander Argentina’s economists examine some of the factors driving growth for South America’s second largest economy.
Agriculture, a driver of the past and the future
Argentina’s highly competitive agricultural sector is a key economic driver with primary and manufactured farming products making up 60% of exports.
The industry benefits from fine weather as well as technological advances in the production of its main export crops: soy and soy derivatives, corn and wheat, among others.
The logistics around agriculture are also an Argentinian strength. Throughout the country there are large storage facilities that enable produce to be shipped seamlessly to ports for international distribution.
Advances in technology for planting, harvesting and crop protection are relentless, with important investments in research and development from both the public and private sectors.
Energy sector has resources the world needs
Argentina’s export potential is boosted by the Vaca Muerta oil and gas field, which is the world’s second biggest shale gas reserve and fourth biggest shale oil reserve.
The country is expected to have an energy surplus of some $5 billion this year and to generate exports worth more than $36 billion a year by 2030.
According to different estimates from private/public sources exports from agriculture, mining and energy, and the rest of sectors, could go from will grow from $88 billion in 2022 to $143 billion by 2030.
Mining of critical minerals has become hugely important as the world accelerates the transition to net zero. In the Andes mountains that form a large part of its western border, Argentina has access to huge reserves of lithium, which is vital for the production of batteries in electric vehicles (EVs).
Argentina has more than 20% of the world’s lithium reserves but less than 10% of annual production. As the automotive industry focuses on an EV future, the potential is obvious.
Entrepreneurship and innovation
Argentina now has 11 unicorns: start-up software companies that are valued at more than $1 billion. However, their success has wider benefits for the country as they generate a vibrant entrepreneurial ecosystem.
Having so many high growth enterprises, that harness local talent and develop world-class technology, also impacts positively Argentina's economy.
