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The Medical Device Market: Argentina
Espicom Business Intelligence Ltd, Oct 2011, Pages: 64
With a population of around 41 million, Argentina is the fourth most populated country in Latin America, behind Brazil, Mexico and Colombia. About 37.9% of the population lives in the province of Buenos Aires, including the capital city. Argentina has one of the highest percentages in the region aged 65 and over (4.5 million in 2011), a significant customer base.
Argentina has recovered well after an economic crisis in 2002, which affected the healthcare sector and medical device market. Imports reached US$435.3 million in 2009, after having fallen from US$362.4 million in 1999 to US$89.9 million in 2002.
In April 2010, the government announced a US$18.3 billion debt swap, having defaulted on its US$100 billion debt in 2001. By June 2010, 92.4% of the 2001 debt was sold on. In November 2011 Argentina received approval from Western governments to negotiate repayment of the remaining US$7 billion without the IMF reviewing its accounts. Investors may still be wary, however.
The country’s GDP is expected to be US$437.5 billion in 2011. Economic growth is expected to be moderate in the short-term from 2011. The Economist Intelligence Unit (EIU) revised their figures upwards again with growth between 3% and 7% until 2016. The peso weakness is expected to keep inflation relatively high and will make medical imports more expensive.
Inflation is a problem in Argentina being estimated at 25% in 2010. High public spending and the government use of central bank reserves to pay off debts are contributing to the situation. Healthcare providers either postponed spending plans or sought alternative suppliers after the economic recession. Argentina, however, has a medium-tech manufacturing sector which was able to supply many healthcare needs in lieu of expensive imports from the USA, although imports are once again recapturing market share. The US share of the import market was 30.5% in 2009, compared with 28.0% in 2003, but over 40.0% before the crisis. Alternative import sources have also been used, such as China or Brazil.
Local producers have increased exports since the depreciation of the peso. In many cases, they have re-established their links with foreign clients, as their trade worsened during the peso-dollar convertibility period. Most of the Latin American clients request small orders which are not attractive for foreign subsidiaries, but which local producers can fulfil. They also demand goods and services adapted to their lifestyle and wealth levels, which, on many occasions, cannot be offered by global companies which use standardised offers and high quality technological equipment. This is another area where domestic producers act.
The government lost its majority in both the Senate and Chamber of Deputies in the mid-term congressional elections on 28th June 2009. In June 2009, the Minister of Health Graciela Ocaña resigned. The next general election will be held on 23rd October 2011 with Christina Kirchner seen as favourite to win as of June 2011.The new Minister of Health is Juan Luis Manzur.
Includes 3 quarterly updated outlook reports!
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