Argentina Systematic Country Diagnostic (SCD) 2025 Streamlined Update - Annex 5 - Systematic Country Partnership Framework for the Period FY2026-FY2033 - Introduction

Jul 19, 2026

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Argentina Systematic Country Diagnostic (SCD) 2025 Streamlined Update outlines the country context and recent economic and social developments in light of a December 2023 policy shift. The update reviews how prior stabilization efforts in the 2018 SCD addressed volatility through macroeconomic management, infrastructure, education, health and education spending efficiency, and fiscal reforms. It assesses progress after fiscal consolidation, devaluation, and the end of monetary financing, while emphasizing persistent inflation, debt pressures, negative reserves, and ongoing poverty and shared prosperity objectives.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages17

Reading Time43 min

Introduction

Country Context and Recent Economic, Social Developments

Public Disclosure Authorized Pub lic Disclosure Authorized Argentina Systematic Country Diagnostic (SCD) 2025 Streamlined Update I. Introduction 1. This 2025 Streamlined SCD Update (“2025 SCD”) is framed within the context of a sea change in Argentina’s direction of travel. A new government that took office in December 2023 implemented a major course correction that included sharp fiscal consolidation, an upfront devaluation of the peso, and an end to the monetary financing of the budget. This was a concerted effort to stabilize the economy characterized by extremely high inflation and budget deficits, negative international reserves, and elevated public debt. Twenty months in, achievements largely exceed expectations though significant challenges remain. 2. The first Argentina SCD, Argentina, Escaping Crises, Sustaining Growth, Sharing Prosperity (“2018 SCD”), was completed in August 2018 during a period that resembled the context faced by the new government in December 2023. At the end of 2017, Argentina’s primary deficit of 3.8 percent of gross domestic product (GDP) and 24.8 percent inflation, combined with high external financing needs, had left the country vulnerable to increased emerging market turmoil. In April 2018, Argentina experienced prolonged currency depreciation alongside increasing country risk.1 The government’s efforts to stabilize markets resulted in a record US$50 billion IMF Stand-By Arrangement.2 3. The 2018 SCD analyzed policies to eliminate Argentina's persistent economic volatility. The focus was placed on macroeconomic policies needed to create a foundation for medium-term growth and shared prosperity, boosting jobs and productivity. The report considered macroeconomic stabilization to be a precondition for creating a healthy and vibrant economy. Additionally, deep reforms were deemed crucial in increasing domestic competition, developing capital markets, and improving education to benefit the population and enhance private-sector growth. Also central to the 2018 SCD was ensuring a strong social safety net for those affected by structural changes in the economy.3 4. The original SCD process involved an extensive evaluation of key policy priorities for development. The evaluation process was largely confirmed by consultations with national and international experts, and the outcome was a recommended set of twelve core policy priorities to help Argentina manage the risks it faced, while moving toward longer-term sustainable growth. Tier 1 priorities included: (i) ensuring sound macroeconomic management, (ii) improving infrastructure, (iii) improving the quality and relevance of education, (iv) increasing the efficiency of spending in health and education, while ensuring equal quality for all; and (v) improving fiscal policy for growth and equity. The Tier 2 priorities were headed by closing gaps in the provision of basic infrastructure services. Annex 1 includes the complete list.4 5. Those original core SCD priorities remain relevant, albeit with some proposed consolidation and adjustment based on the updated knowledge and context of 2025. As in 2018, the 2025 SCD update aims to look beyond Argentina’s response to crises toward the medium and longer-term goals of reducing poverty and ensuring shared prosperity for all. The added dimension today, in line with the new World Bank Group (WBG) mission, is helping to ensure these goals are achieved on a livable planet. 1 World Bank (2018) . 2 IMF, [https://www.imf.org/en/News/Articles/2018/06/20/pr18245-argentina-imf-executive-board-approves-us50-billion-stand-by](https://www.imf.org/en/News/Articles/2018/06/20/pr18245-argentina-imf-executive-board-approves-us50-billion-stand-by)arrangement, June 20, 2018, Washington DC. 3 World Bank (2018) . 4 World Bank (2018) . II. Country Context and Recent Economic, Social Developments 6. Although growth accelerated in the first decade of the 21st century, following a debt default in 2001 an

FAQs

What policy shift is highlighted in the 2025 SCD update?

A new government took office in December 2023 and implemented sharp fiscal consolidation, an upfront devaluation of the peso, and ended monetary financing of the budget to stabilize an economy marked by very high inflation and deficits.

How does the 2025 update relate to the earlier 2018 SCD?

The 2018 SCD focused on reducing persistent economic volatility and set core policy priorities; the 2025 update keeps those priorities relevant while consolidating and adjusting them based on updated knowledge and context.

What major economic issues are described for Argentina around 2023?

The update notes GDP contraction, high inflation reaching triple digits, monetary financing of fiscal deficits, market distortions from price controls, and negative net international reserves by end-2023.

Jul 19, 2026

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