Argentina is once again in the grips of an economic crisis, with its economy expected to see meager growth in 2023 or even a contraction.
Despite the economic gloom and doom, Argentina’s oil and gas sector is providing some positivity as production continues to grow.
The Vaca Muerta shale formation has long been seen as a silver bullet for Argentina’s economic woes, but it is far from the only bright spot in the country’s oil industry.
Argentina, which with a 2022 gross domestic product of $632 million is Latin America’s third-largest economy, is once again in the midst of a deep economic crisis that emerged during the 2020 COVID-19 pandemic. The severity of the crisis is illustrated by the country defaulting on its sovereign debt in May 2020 for the ninth time in its history. Despite GDP growing by a notable 10% during 2021 and then 5% in 2022, rampant inflation, which recently topped 104%, weak government finances, and a soaring current account deficit are all weighing on the economy. As a result, the economy will expand by a meager 0.2% during 2023 and could even contract. For these reasons, Buenos Aires views the growing hydrocarbon sector as a solution with the vast Vaca Muerta shale formation seen as a silver bullet for Argentina’s considerable economic woes.
