Argentina needs further reforms to boost economy, says OECD

10 Aug 17

Argentina needs further reforms to boost productivity and competitiveness of the economy, the Organisation for Economic Co-operation and Development has identified. 

 

It praised the government’s recent programme of macroeconomic and structural reforms but said more attention was needed to the regulatory framework, product and labour markets reforms, tax policy, infrastructure, innovation and trade policy “with clear objectives regarding inclusiveness”.

Policies that shielded poor and vulnerable households from bearing the adjustment costs of change could deliver substantial benefits for all Argentineans, the OECD noted in's first multi-dimensional economic survey of the country, released at the end of last month.

Gabriela Ramos, OECD chief of staff and G20 ‘sherpa’ for the country, said: “Argentina has undertaken a courageous economic turn-about, improving its attractiveness to domestic and international investment.

“But what matters most will be delivering greater well-being to the Argentine people.  Inequality, poverty and informality are a drag on growth and should be at the centre-stage of efforts toward a sustainable and inclusive future.”

The OECD said Argentina should improve the efficiency of public spending, by phasing out energy subsidies, rationalising public employment and bringing down costs in state-owned enterprises.

It noted income distribution was “very unequal”, with one-third of the population living in poverty and a further 20% at risk of falling into poverty.

Supporting these groups would be crucial to making any progress sustainable over time, it said.

Argentina underwent a change of government at the 2015 presidential election, won by Mauricio Macri of the centre-right Republican Proposal party.

His win ended more than a decade of government by the populist Justicialist party.

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