Filed Pursuant to Rule 424(b)(3)
Registration No. 333-216627

PROSPECTUS

The Republic of Argentina

Offers to exchange its

6.250% Bonds Due 2019 (the “New 2019 Bonds”) for 6.250% Bonds Due 2019

(the “2019 Bonds”),

6.875% Bonds Due 2021 (the “New 2021 Bonds”) for 6.875% Bonds Due 2021

(the “2021 Bonds”),

7.500% Bonds Due 2026 (the “New 2026 Bonds”) for 7.500% Bonds Due 2026

(the “2026 Bonds”),

7.625% Bonds Due 2046 (the “New 2046 Bonds”) for 7.625% Bonds Due 2046

(the “2046 Bonds”),

6.625% Bonds Due 2028 (the “New 2028 Bonds”) for 6.625% Bonds Due 2028

(the “2028 Bonds”),

7.125% Bonds Due 2036 (the “New 2036 Bonds”) for 7.125% Bonds Due 2036

(the “2036 Bonds”),

5.625% Bonds Due 2022 (the “New 2022 Bonds”) for 5.625% Bonds Due 2022

(the “2022 Bonds”) and

6.875% Bonds Due 2027 (the “New 2027 Bonds”) for 6.875% Bonds Due 2027

(the “2027 Bonds”)

Terms of the Offers

• The offers commence on March 14, 2017 and expire at 5:00 p.m., New York City time, on April 12, 2017, unless we extend it.

• The Republic is offering to exchange the Bonds (as defined herein) that it sold in transactions exempt from registration under the Securities Act of 1933 for new registered New Bonds (as defined herein).

• The offers is subject to certain conditions that the Republic may waive in its discretion.

• The terms of the New Bonds are identical to the terms of the Bonds, except for the transfer restrictions and registration rights relating to the Bonds.

• The Republic believes that the exchange of New Bonds for Bonds will not be a taxable exchange for U.S. federal income tax purposes.

• You may withdraw tenders of Bonds at any time prior to the expiration of the offers.

• The Republic will not receive any proceeds from the offers.

• The Republic will pay certain expenses incidental to the offers.

• The Republic expects to list the New Bonds on the Luxembourg Stock Exchange

You should read this prospectus carefully. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of this prospectus.

The Republic is not making an offer to exchange New Bonds for Bonds in any jurisdiction where the offers are not permitted.

Neither the Securities and Exchange Commission (the “SEC”) nor any other regulatory body has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is March 14, 2017.

TABLE OF CONTENTS

Defined Terms and Certain Conventions	ii
Presentation of Statistical and Other Information	viii
Enforcement of Civil Liabilities	xi
Forward-Looking Statements	xiii
Summary of The Offers	1
The New Bonds	6
Use of Proceeds	11
Recent Developments	12
The Republic of Argentina	35
The Argentine Economy	43
Balance of Payments	80
Monetary System	104
Public Sector Finances	128
Public Sector Debt	159
The Offers	198
Description of the New Bonds	208
Taxation	227
Plan of Distribution	230
Data Dissemination	231
Official Statements	231
Validity of the Securities	231
Authorized Representative	231
General Information	231
Tables and Supplemental Information	A-1

Each broker-dealer that receives New Bonds for its own account pursuant to the offers must acknowledge that it will deliver a prospectus in connection with any resale of those New Bonds. However, by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Bonds received in exchange for Bonds where those Bonds were acquired by that broker-dealer as a result of market-making activities or other trading activities. The Republic has agreed that, for a period of 120 days after the expiration date of the offers, broker-dealers shall be authorized to deliver (or, to the extent permitted by law, make available) this prospectus for use in connection with any resale of that sort. See “Plan of Distribution.”

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DEFINED TERMS AND CERTAIN CONVENTIONS

Certain Defined Terms

All references in this prospectus to the “Government” are to the non-financial sector of the federal government of Argentina, excluding the Central Bank, Banco de la Nación Argentina and Banco de Inversión y Comercio Exterior (Foreign Investment and Trade Bank, or “BICE”).

The terms set forth below have the following meanings for purposes of this prospectus:

• April 2016 Transaction, refers to the April 22, 2016, U.S.$16.5 billion issuance of new debt securities in the international capital markets by the Republic, of which U.S.$9.3 billion were applied to satisfy settlement payments in connection with agreements with holders of Untendered Debt.

• April Bonds, refers to the 2019 Bonds, the 2021 Bonds, the 2026 Bonds and the 2046 Bonds.

• BADLAR rate is an average rate published by the Central Bank based on a survey of financial institutions in Argentina regarding the nominal annual interest rate in peso-denominated time deposits of more than Ps. 1.0 million from 30 to 35 days.

• Bonds, refers to the April Bonds together with the January Bonds and July Bonds.

• Defaulted debt or debt in default as of any given date refers to all of Argentina’s public indebtedness on which Argentina is not paying principal or interest as of such date, plus any past due principal and interest payments calculated at contractual rates.

• Gross domestic product, or GDP, means the total value of final products and services produced in Argentina during the relevant period.

• January Bonds, refers to the 2022 Bonds together with the 2027 Bonds.

• July Bonds, refers to the 2028 Bonds together with the 2036 Bonds.

• Ley de Normalización de la Deuda Pública y Acceso al Crédito (the “Debt Authorization Law”) means Law No. 27,249 passed by Congress on March 31, 2016 repealing, among other laws and legislation, Laws Nos. 26,017, 26,547 and 26,886 which prohibited the Republic from making any payment or settlement on Untendered Debt (the “Lock Laws”), and Law No. 26,984 (the “Sovereign Payment Law”), and authorizing the Republic to settle with certain holders of its Untendered Debt, continue negotiating and issue debt securities to raise the funding required to effect the settlements with holders of its Untendered Debt.

• Non-performing debt refers to public indebtedness of Argentina that was formally subject to the moratorium declared by the Government in December 2001, other than “Untendered Debt.” Argentina’s non-performing debt encompasses all the public debt in which Argentina is in default as of any given date (other than Untendered Debt), including past due principal and interest payments calculated at contractual rates. Non-performing debt also includes the following:

(i) certain debt obligations on which the Government has continued to make payments on a case-by-case basis (such as in cases of extreme necessity (e.g., for senior citizens 75 years of age or older) or when the provision of essential services is threatened), despite being formally subject to the suspension of debt payments; and

(ii) certain obligations that resulted from the advance payment of tax obligations by certain companies. These advance tax payments gave rise to claims against the Government for the amount of the payment. The Government considers these claims additional public indebtedness of Argentina and they are treated as such in the Government’s accounts. These claims, however, are discharged when the tax obligation that gave rise to the advanced payment actually becomes payable, at which time the tax obligation is cancelled. Accordingly, although formally subject to the suspension of payments, the Government’s obligations in respect of these claims are not in default.

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• New April Bonds, refers to the New 2019 Bonds, the New 2021 Bonds, the New 2026 Bonds and the New 2046 Bonds .

• New Bonds refers to the New April Bonds together with the New January Bonds and the New July Bonds.

• New January Bonds, refers to the New 2022 New Bonds together with the New 2027 Bonds.

• New July Bonds, refers to the New 2028 Bonds together with the New 2036 Bonds.

• Settlement Proposal refers to the proposal, published by the Republic on February 5, 2016 in the Ministry of Treasury and Public Finances’ website, to settle all claims on Untendered Debt, including bonds in litigation in the United States, subject to two conditions: first, obtaining approval by the Argentine Congress, and second, lifting the pari passu injunctions. The Settlement Proposal contemplated two frameworks for settlement. The “pari passu option,” which was extended as an option to plaintiffs holding pari passu injunctions granted by courts of the United States, provided for payment equal to the full amount of money judgment or an accrued claim value less a specified discount. The “standard option,” which remains open to all holders of Untendered Debt, whether or not they had pari passu injunctions, provides for payment equal to 100% of the outstanding principal amount of the relevant debt securities plus up to 50% of that original principal as interest. Any eligible holder of Untendered Debt may agree to the terms of the standard option, in accordance with the procedures set forth and published by the Ministry of the Treasury and, in accordance with such terms, becomes party to a binding agreement in principle with the Republic once the amounts to be paid are reconciled and the agreement is countersigned by the Republic.

• Untendered Debt means, with respect to data included herein through 2015, defaulted debt in respect of securities that were eligible for, but not tendered in, the 2005 Debt Exchange and the 2010 Debt Exchange. References to Untendered Debt in this prospectus do not constitute, and shall not be read or construed to constitute a waiver of any defenses available to the Republic with respect to the enforcement of any claim thereunder. See “Preservation of Defenses.” Any amounts of Untendered Debt set forth in this prospectus have been defined in this prospectus to include unpaid principal plus accrued and unpaid interest at contractual rates through December 31, 2015, including penalty or default interest. In settling outstanding disputes with holdout creditors pursuant to the Settlement Proposal, the Republic took into consideration interest accrued after the originally scheduled maturity of each defaulted series of securities (other than interest subject to statute of limitations), as well as default interest. For information regarding the Republic’s Settlement Proposal to settle all claims on the Untendered Debt, see “Public Sector Debt—Legal Proceedings.”

• 2005 Debt Exchange refers to the restructuring and exchange of public debt that had been in default since the end of 2001 undertaken by the Government between January and May of 2005.

• 2010 Debt Exchange refers to the restructuring and exchange of public debt that had been in default since the end of 2001 undertaken by the Government between April and December 2010.

For purposes of this prospectus, the following terms, which refer to various public debt instruments, have the meanings set forth below:

• BAADE. “Argentine Saving Bond for Economic Development” and the “Saving Promissory Note for Economic Development” are both to be issued by the Ministry of the Treasury and to be denominated in U.S. dollars, maturing in 2016 and accruing interest at a 4% rate. Funds obtained from the issuance of these bonds will be used to finance public investment projects in strategic sectors like infrastructure and hydrocarbons.

• Bocones. Bonds that the Government began issuing in 1991 to restructure its obligations to pensioners and suppliers and to settle reparations of members of family of victims of the military dictatorship.

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• Bogar. Bonds issued by the Provincial Development Fund to restructure debt obligations of the provinces. These bonds are guaranteed by the Government and secured by a pledge of certain provincial tax revenues.

• Bogar 2018. Bogar with maturity date in 2018.

• Bogar 2020. Bogar with maturity date in 2020.

• Bonacs. Bonds that the Government began issuing in 2015 for general purposes of the Government, with a floating interest rate (LEBACs and others) and maturity in 2016.

• Bonads. Dollar denominated bonds payable in pesos (dollar linked) that the Government began issuing in 2014 for general purposes of the Government.

• Bonares. Bonds that the Government began issuing in 2006 for general purposes of the Government and in exchange for CER-index linked bonds.

• Global Bond. Government bonds issued in the international capital markets under the Government’s shelf registration statements filed with the SEC.

• LEBACs. Short-term notes issued by the Central Bank. They are denominated principally in pesos.

• National Guaranteed Loans. Tax-secured loans that the Government exchanged for previously outstanding Government bonds as part of a voluntary debt offers that took place in 2001. Holders of National Guaranteed Loans retained the right to recover their original bonds upon default.

• NOBACs. Medium-term notes issued by the Central Bank denominated only in pesos.

• Promissory Notes Pesos 2019. Promissory notes issued in pesos at an annual floating interest rate equal to the BADLAR rate plus 250 basis points with an amount equal to the BADLAR rate to be capitalized during the first two years and paying 250 basis points interest rate during such period, and paying the full floating interest rate thereafter, maturing in 2019.

• 2033 Discount Bonds. Discount bonds due December 2033 denominated in U.S. dollars, euros, Japanese yen and pesos issued by Argentina in its 2005 Debt Exchange and the discount bonds due December 2033 denominated in U.S. dollars issued by Argentina for cash subsequent to the 2005 Debt Exchange.

• 2033 Discount Bonds (2010). Discount bonds due December 2033 denominated in U.S. dollars, euros, Japanese yen and pesos issued by Argentina in its 2010 Debt Exchange.

• 2017 Globals. U.S. dollar-denominated Global Bonds due 2017 issued in the international capital markets pursuant to the 2010 Debt Exchange.

• 2035 GDP-Linked Securities. Long-term Government Treasury securities denominated in U.S. dollars, euros, Japanese yen and pesos issued in the international capital markets pursuant to the 2005 Debt Exchange and expiring no later than December 2035.

• 2035 GDP-Linked Securities (2010). Long-term Government Treasury securities denominated in U.S. dollars, euros, Japanese yen and pesos issued in the international capital markets pursuant to the 2010 Debt Exchange and expiring no later than December 2035.

• 2038 Par Bonds. Long-term Government Treasury bonds denominated in U.S. dollars, euros, Japanese yen and pesos issued in the international capital markets pursuant to the 2005 Debt Exchange.

• 2038 Par Bonds (2010). Long-term Government Treasury bonds denominated in U.S. dollars, euros, Japanese yen and pesos issued in the international capital markets pursuant to the 2010 Debt Exchange.

• 2045 Quasi-Par Bonds. Long-term Government Treasury bonds denominated in pesos issued in the international capital markets pursuant to the 2005 Debt Exchange.

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Preservation of Defenses

Nothing in this prospectus, or in any communication from the Republic, constitutes an acknowledgment or admission of the existence of any claim or any liability of the Republic to pay that claim or an acknowledgment that any ability to bring proceedings in any jurisdiction in respect of such claim or any limitation period relating thereto has been revived or reinstated, or an express or implied promise to pay any such claim (or part thereof). Whether or not a claim exists, the Republic may in its sole discretion and only if written notice to that effect is received from a duly authorized officer of the Republic, attribute a value to such claim for purposes of the Republic’s Settlement Proposal or for any other purpose. All defenses available to the Republic relating to any applicable statute of limitations or otherwise are expressly preserved for all purposes. This prospectus may not be relied upon as evidence of the Republic’s agreement that a claim exists, or of the Republic’s willingness, ability or obligation to pay any claim. Any attribution of any value to any claim for purposes of the Republic’s Settlement Proposal or for any other purpose will not be considered an acknowledgment of the existence or validity of that claim and any consideration given by or on behalf of the Republic to the proponent of that claim will be consideration only for the agreement by the proponent of that claim to cease all actions or proceedings in respect of that claim and to irrevocably assign and transfer to the Republic all rights, if any, with respect to such claim and to undertake to complete any and all formalities or requirements necessary to ensure that if such claim existed neither the proponent nor any successor or assignee of the proponent (other than the Republic) is able to evidence or allege such claim to remain in existence or to be a liability of the Republic.

Delivery of Documents

We are delivering copies of this prospectus in electronic form through the facilities of The Depository Trust Company (“DTC”). By tendering Bonds a holder will represent, warrant and agree that it has received this prospectus. The Republic will make paper copies of the prospectus available to holders of Bonds through the agent appointed by the Republic for the purposes of these offers. You may also obtain paper copies of the prospectus by contacting the Luxembourg listing agent at its address specified on the inside back cover of this prospectus.

Currency of Presentation

Unless otherwise specified, references in this prospectus to “pesos” and “Ps.” are to Argentine pesos, references to “U.S. dollars” and “U.S.$” are to the currency of the United States of America, references to “euros,” “€” and “EUR” are to the currency of the European Union, references to “CHF” are to Swiss francs and references to “Japanese yen” or “JPY” are to Japanese yens.

Exchange Rates and Exchange Controls

The Republic publishes most of its economic indicators and other statistics in pesos. Beginning in February 2002, the peso was allowed to float against other currencies. After several years of fluctuations in the nominal exchange rate, the peso lost approximately 14% of its value against the U.S. dollar in 2012. Despite increased Central Bank intervention and measures to limit Argentine residents’ access to foreign currency, the peso devalued by 32.6% and 31.3% against the U.S. dollar in 2013 and 2014, respectively. In December 2015, the Macri administration eliminated a significant portion of the foreign exchange restrictions and the Central Bank returned to a free-float policy with interventions designed to enhance the operation of the foreign exchange market. Immediately after a significant portion of the foreign exchange controls were lifted on December 16, 2015, the peso devalued by approximately 40%, as the peso-U.S. dollar exchange rate reached Ps. 13.76 to U.S.$1.00 on December 17, 2015. The peso has since floated freely with limited intervention by the Central Bank, and the nominal exchange rate experienced moderate variations. On December 31, 2016, the exchange rate was Ps. 15.85 to U.S.$1.00.

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Exchange Rates

The following table sets forth the annual high, low, average and period-end “reference” exchange rates for the periods indicated, expressed in pesos per U.S. dollar and not adjusted for inflation. There can be no assurance that the peso will not depreciate or appreciate in the future. The Federal Reserve Bank of New York does not report a noon buying rate for pesos.

	Exchange rates(1)
	High		Low		Average(2)		Period end
Year ended December 31,
2011		4.304		3.972		4.130		4.303
2012		4.917		4.305		4.552		4.917
2013		6.518		4.923		5.479		6.518
2014		8.556		6.543		8.119		8.552
2015		13.763		8.554		9.269		13.005
2016		16.039		13.069		14.779		15.850
January 2017		16.053		15.808		15.907		15.912
February 2017		15.835		15.368		15.598		15.455
March 2017(3)		15.501		15.388		15.541		15.501

(1) Central Bank reference exchange rates (Communication A 3500 of Central Bank).

(2) Average of daily closing quotes.

(3) Through March 7, 2017.

Source: Central Bank.

Currency conversions, including conversions of pesos into U.S. dollars, are included for the convenience of the reader only and should not be construed as a representation that the amounts in question have been, could have been or could be converted into any particular denomination, at any particular rate or at all.

As of March 7, 2017, the peso-dollar reference exchange rate was Ps. 15.50 to U.S.$1.00.

Exchange Controls

In response to the deterioration of the Argentine economy and financial system in 2001, the inability of the Republic to service its public external indebtedness and the decreased level of deposits in the financial system, the Government issued Decree No. 1,570/2001 on December 3, 2001, which established certain monetary and currency exchange control measures, including restrictions on the free disposition of funds deposited in banks and restrictions on the transfer of funds abroad, subject to certain exceptions.

In addition to the above measures, on February 8, 2002, the Government and the Central Bank made certain transfers of funds abroad to service principal and/or interest payments on foreign indebtedness subject to prior authorization. From 2011 until the Macri administration took office in December 2015, the Government increased controls on the sale of foreign currency and the acquisition of foreign assets by local residents, limiting the possibility of transferring funds abroad. In 2012, the Government adopted an import procedure under which any import of products required the pre-approval of local authorities in the form of a Declaración Jurada Anticipada de Importación (Advance Sworn Import Declaration, or “DJAI”). The DJAI was a precondition for the importer to gain access to the foreign exchange market to pay for imported products, which was, in effect, a material barrier to the import of goods into Argentina, as any alternative method of payment significantly increased the costs of such transactions.

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Together with the regulations established in 2012 that subjected certain foreign exchange transactions to prior approval by the Argentine tax authorities or the Central Bank, the measures taken by the Fernández de Kirchner administration significantly curtailed access to the Mercado Único y Libre de Cambio (the “MULC”). In response, an unofficial U.S. dollar trading market developed in which the peso-U.S. dollar exchange rate differed substantially from the official peso-U.S. dollar exchange rate.

Current Regulations

As of December 2016, in line with the economic reforms implemented by the newly elected Macri administration, the Ministry of Finance and the Central Bank issued regulations that eliminated most substantially all of the foreign exchange restrictions imposed since 2011. Following an initial set of measures adopted in December 2015 with the aim of increasing capital inflows, the Government and the Central Bank introduced additional measures to eliminate a significant portion of the restrictions affecting the trade balance. In this regard, on August 8, 2016 the Central Bank introduced further material changes to the foreign exchange regime and established, as of August 9, 2016, a new foreign exchange regime by means of Communication “A” 6037 (as amended) that significantly eases access to the MULC. On December 30, 2016, the Central Bank further eased foreign exchange controls by eliminating the mandatory repatriation of proceeds from export services. On January 4, 2017, the Ministry of the Treasury eliminated the mandatory minimum stay period applicable to (i) the inflow of funds to the local foreign exchange market arising from certain foreign indebtedness and (ii) any entry of funds to the foreign exchange market by non-residents.

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PRESENTATION OF STATISTICAL AND OTHER INFORMATION

All annual information presented in this prospectus is based upon January 1 to December 31 periods, unless otherwise indicated. Totals in some tables in this prospectus may differ from the sum of the individual items in those tables due to rounding.

Unless otherwise stated, prices and figures are stated in current values of the currency presented, and references in this prospectus to “pesos” and “Ps.” are to Argentine pesos, references to “U.S. dollars” and “U.S.$” are to the currency of the United States of America, references to “euros,” “€” and “EUR” are to the currency of the European Union, references to “CHF” are to Swiss francs and references to “Japanese yen” or “JPY” are to Japanese yens.

Information in this prospectus that is identified as being derived from a publication of the Republic or one of its respective agencies or instrumentalities is included as public official statements made on the authority of the Republic. Certain statistical information included in this prospectus is preliminary and is subject to change, completion or amendment.

INDEC

Statistical information reported in this prospectus has been derived from official publications of, and information supplied by, a number of agencies, including the INDEC and the Dirección General de Estadística y Censos de la Ciudad de Buenos Aires (General Directorate of Statistics and Census of the City of Buenos Aires).

During the Fernández de Kirchner administration, the INDEC—the only institution in Argentina with the statutory authority to produce official nationwide statistics—underwent institutional and methodological reforms that gave rise to controversy regarding the reliability of the information that it produced, including CPI, GDP, unemployment and poverty data. Reports published by the International Monetary Fund (“IMF”) have stated that their staff uses alternative measures of inflation for macroeconomic surveillance, including data produced by private sources, which have shown inflation rates considerably higher than those published by the INDEC between 2007 and 2015. The IMF also censured Argentina for failing to make sufficient progress, as required under the Articles of Agreement of the IMF, in adopting remedial measures to address the quality of official data, including CPI and GDP data. In February 2014, the INDEC released a new inflation index, known as the Indice de Precios al Consumidor Nacional Urbano (National Urban Consumer Price Index, or “CPI Nu”), which was intended to measure prices on goods across the country and replaced the previous index that only measured inflation in the City of Buenos Aires and its surrounding areas. Although this new methodology was expected to bring inflation statistics closer to those estimated by private sources, differences between official inflation data and private estimates remained.

On January 8, 2016, based on its determination that the INDEC had failed to produce reliable statistical information, particularly with respect to CPI, GDP and foreign trade data, as well as poverty and unemployment rates, President Macri declared a state of administrative emergency for the national statistical system and the INDEC until December 31, 2016. The INDEC suspended publication of certain statistical data pending reorganization of its technical and administrative structure to recover its ability to produce reliable statistical information. The INDEC published official CPI figures published by the City of Buenos Aires and the Province of San Luis for reference for the first four months of 2016. In June 2016, the INDEC began publishing an official inflation rate using its new methodology for calculating the CPI.

On June 29, 2016, the INDEC published (the “INDEC Report”) a revised calculation of the 2004 gross domestic product (“GDP”), which forms the basis of Argentina’s real GDP calculation for every year thereafter. Among other adjustments, in calculating GDP for 2004 the INDEC made changes to the composition of GDP that resulted in a downward adjustment of approximately 10% for that year. In calculating real GDP for subsequent years based on the revised 2004 GDP, the INDEC used deflators that are consistent with its revised

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methodology to calculate inflation. By understating inflation in the past, the INDEC had overstated growth in real terms. For more information, see “—Certain Methodologies.”

On November 9, 2016, the IMF Executive Board lifted its censure on the Republic, noting that the Republic has resumed the publication of data in a manner consistent with its obligations under the Articles of Agreement of the IMF.

As of the date of this prospectus, the INDEC has published the INDEC Report (which includes GDP data), the CPI for May, June, July, August, September, October, November and December 2016, and January 2017 and certain revised foreign trade and balance of payment statistics for the years 2010 through 2015 since the state of administrative emergency was declared on January 8, 2016, which are included in this prospectus.

The INDEC is currently implementing a number of measures to produce reliable statistical information that include, among others, investments in basic statistical collection procedures, the expansion of social statistics and the strengthening of economic development statistics. In this context, the INDEC is planning a series of initiatives that are expected to improve the reliability of basic statistics, including conducting a national household expenditure survey for the period 2017-2018, extending the basket of goods and prices covered to include locations across Argentina (previously limited to the greater Buenos Aires area) for purposes of calculating CPI, a mining census in 2017, an economic activity census and an agricultural census in 2018, in all cases to be carried out prior to next national census scheduled for 2020.

In relation to the revision and production of historical statistical information, in particular related to poverty, the INDEC, in its September 2016 Incidence Report on Poverty and Indigence, states that it continues to have reservations with respect to statistical series between January 2007 and December 2015, except for any information that has been restated in the relevant 2016 reports.

The INDEC’s reservations result from the inability to obtain adequate historical data that would allow for the completion of series left incomplete prior to the declaration of statistical emergency. Accordingly, reports on poverty and indigence levels for the missing periods and dates cannot be reconstructed primarily to the lack of reliable data for the relevant periods and as of the relevant dates. In furtherance of the authority delegated to the INDEC by Decrees No. 181/15 and 55/16, the INDEC has commissioned studies to determine the adequacy of the process for obtaining data, the process for the analysis of such data, the elaboration of indicators and its publication procedures.

National Public Accounts

Historically, transfers from the Central Bank and the Fondo de Garantía de Sustentabilidad (the “FGS”) to the Government were recorded as current fiscal revenue under “other non-tax revenue.” Starting in 2016 (and on a pro forma basis for 2015), the Government now classifies income generated by the Central Bank and the FGS as financial revenue that does not form part of the calculation of the primary fiscal balance. See “Public Sector Finances—Introduction.”

Certain Methodologies

CER and CVS. Certain data included in this prospectus has been adjusted for inflation based on the Coeficiente de Estabilización de Referencia (Stabilization Coefficient, or “CER”), or the Coeficiente de Variación Salarial (“CVS”). CERs are units of account whose value in pesos is indexed to consumer price inflation. Following the declaration of a state of administrative emergency for the national statistical system and the INDEC in January 2016, the INDEC suspended its publication of the CPI index that had been used to determine the value of CERs in pesos since February 2014. Accordingly, between January 12 and June 2, 2016, the Government issued a series of resolutions designating either the CPI calculated by the government of the City of Buenos Aires or the CPI calculated by the Province of San Luis as the index to be used by the Central Bank to

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calculate the CER. On June 15, July 13, August 12 and September 13, October 13, November 10, December 15, 2016, January 11, February 9 and March 9, 2017, the INDEC published the inflation rates for May, June, July, August, September, October, November and December 2016, and January and February 2017, respectively, using its new methodology for calculating the CPI. On June 16, 2016, the Government announced that beginning on June 26, 2016 it would resume using the INDEC CPI to calculate the CER. The nominal amount of a CER-based financial instrument is converted to a CER-adjusted amount and interest on the financial instrument is calculated on the CER-adjusted balance. CVSs are units of account whose value in pesos is determined based on changes in an index of public and private sector wages. The nominal amount of a CVS-based financial instrument is converted to a CVS-adjusted amount and interest on the financial instrument is calculated on the CVS-adjusted balance. Adjustments and payments on the Republic’s debt indexed to the CER and CVS are not subject to restatement or revision.

Exports. Exports are calculated based upon (i) for purposes of foreign trade, statistics reported to Argentine customs upon departure of goods from Argentina on a FOB basis and (ii) for purposes of the balance of payments accounts, statistics collected on a FOB basis.

Imports. Imports are calculated based upon (i) for purposes of foreign trade, statistics reported to Argentine customs upon entry of goods into Argentina on a cost, insurance and freight included basis (“CIF basis”) and (ii) for purposes of the balance of payments accounts, statistics collected on a free on board (“FOB basis”) at a given departure location.

Inflation. The rate of inflation or inflation rate provides an aggregate measure of the rate of change in the prices of goods and services in the economy. The inflation rate is generally measured by the rate of change in the CPI between two periods unless otherwise specified. The annual percentage rate of change in the CPI as of a particular date is calculated by comparing the index as of that date against the index as of the date twelve months prior. The CPI in Argentina is calculated by the INDEC. However, as a result of widespread concerns regarding the credibility of the INDEC’s calculations that resulted in the declaration of a state of administrative emergency in January 2016, alternative measures of CPI inflation are presented in this prospectus for certain periods using the CPI calculated by the government of the City of Buenos Aires (the “City of Buenos Aires CPI”) and by the government of the Province of San Luis (the “Province of San Luis CPI”) for certain periods. The CPI for May, June, July, August, September, October, November and December 2016, and January and February 2017 were published by the INDEC on June 15, July 13, August 12, September, October 13, November 10, December 15, 2016, January 11, and February 9 and March 9, 2017, respectively, based on the INDEC’s new methodology for calculating the CPI. The City of Buenos Aires CPI and Province of San Luis CPI are based on a weighted basket of consumer goods and services that reflects the pattern of consumption of households that reside in the City of Buenos Aires and the Province of San Luis, respectively. All references in this prospectus to “CPI” are to the “INDEC CPI,” the “City of Buenos Aires CPI” or “the Province of San Luis CPI,” as indicated herein. References to “constant 2004 prices” in this prospectus relate to data that was revised by the INDEC and included in the INDEC Report.

Underemployment rate. Underemployment rate represents the percentage of Argentina’s labor force that has worked fewer than 35 hours during the week preceding the date of measurement and seeks to work more.

Unemployment rate. Unemployment rate represents the percentage of Argentina’s labor force that has not worked a minimum of one hour with remuneration or 15 hours without remuneration during the week preceding the date of measurement. The “labor force” refers to the sum of the population in major urban centers across Argentina that has worked a minimum of one hour with remuneration or 15 hours without remuneration during the week preceding the date of measurement plus the population that is unemployed but actively seeking employment.

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ENFORCEMENT OF CIVIL LIABILITIES

The Republic is a sovereign state. Consequently, it may be difficult for investors or a trustee to obtain, or realize in the United States or elsewhere upon, judgments against the Republic. In addition, as described below, pursuant to Argentine law, many assets of the Republic are entitled to immunity from attachment or foreclosure, including all funds dedicated to the payment of expenditures approved as part of the national budget.

To the fullest extent permitted by applicable law, the Republic will irrevocably submit to the exclusive jurisdiction of any New York state or U.S. federal court sitting in the Borough of Manhattan, City of New York, and the courts of the Republic and, in each case, any appellate court thereof (each, a “Specified Court”) in any suit, action or proceeding arising out of or relating to the New Bonds or the Republic’s failure or alleged failure to perform any obligations under the New Bonds against it or its properties, assets or revenues (a “Related Proceeding”), subject to its Reserved Right (as defined below). The Republic will irrevocably and unconditionally waive, to the fullest extent permitted by law, any objection that it may have to Related Proceedings brought in a Specified Court whether on the grounds of venue, residence or domicile or on the ground that the Related Proceedings have been brought in an inconvenient forum (except for any Related Proceedings relating to the securities laws of the United States or any state thereof).

Subject to its Reserved Right, to the extent that the Republic or any of its revenues, assets or properties are entitled, in any jurisdiction in which any Specified Court is located, in which any Related Proceeding may at any time be brought against it or any of its revenues, assets or properties, or in any jurisdiction in which any Specified Court is located in which any suit, action or proceeding may at any time be brought for the purpose of enforcing or executing any judgment issued in any Related Proceeding (the “Related Judgment”), to any immunity from suit, from the jurisdiction of any such court, from set-off, from attachment prior to judgment, from attachment in aid of execution of judgment, from execution of a judgment or from any other legal or judicial process or remedy, and to the extent that in any such jurisdiction there shall be attributed such an immunity, the Republic irrevocably waives such immunity to the fullest extent permitted by the laws of such jurisdiction, including the United States Foreign Sovereign Immunities Act of 1976 (the “FSIA”) (and consents to the giving of any relief or the issue of any process in connection with any Related Proceeding or Related Judgment as permitted by applicable law, including the FSIA), provided, however, that such waiver shall not extend to and the Republic shall be immune in respect of and in relation to any suit, action or proceeding or enforcement of any Related Judgment against:

(i) any reserves of the Banco Central de la República Argentina (the Central Bank of Argentina, or the “Central Bank”);

(ii) any property in the public domain located in the territory of the Republic, including property that falls within the purview of Sections 234 and 235 of the Civil and Commercial Code of the Republic;

(iii) any property located in or outside the territory of the Republic that provides an essential public service;

(iv) any property (whether in the form of cash, bank deposits, securities, third party obligations or any other methods of payment) of the Republic, its governmental agencies and other governmental entities relating to the performance of the budget, within the purview of Sections 165 through 170 of Law No. 11,672, Ley Complementaria Permanente de Presupuesto (t.o. 2014);

(v) any property entitled to the privileges and immunities of the Vienna Convention on Diplomatic Relations of 1961 and the Vienna Convention on Consular Relations of 1963, including, but not limited to, property, premises and bank accounts used by the missions of the Republic;

(vi) any property used by a diplomatic, governmental or consular mission of the Republic;

(vii) taxes, duties, levies, assessments, royalties or any other governmental charges imposed by the Republic, including the right of the Republic to collect any such charges;

(viii) any property of a military character or under the control of a military authority or defense agency of the Republic;

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(ix) property forming part of the cultural heritage of the Republic; or

(x) property entitled to immunity under any applicable sovereign immunity laws.

This waiver of sovereign immunity constitutes only a limited and specific waiver for the purpose of the New Bonds and under no circumstances shall it be interpreted as a general waiver by the Republic or a waiver with respect to proceedings unrelated to the New Bonds. The Republic reserves the right to plead sovereign immunity under the FSIA with respect to actions brought against it under the U.S. federal securities laws and the appointment of an authorized agent does not extend to such actions or any state securities laws (the “Reserved Right”).

A judgment obtained against the Republic in a foreign court may be enforced in the courts of Argentina. Based on existing law, the courts of Argentina will enforce such a judgment in accordance with the terms and conditions of the treaties entered into between Argentina and the country in which the judgment was issued. In the event there are no such treaties, the courts of Argentina will enforce the judgment if it:

• complies with all formalities required for the enforceability thereof under the laws of the country in which it was issued;

• has been translated into Spanish, together with all related documents, and it satisfies the authentication requirements of the laws of Argentina;

• was issued by a competent court, according to Argentine principles of international law, as a consequence of a personal action (action in personam) or a real action (action in rem) over a movable property if it has been moved to Argentina during or after the time the trial was held before a foreign court;

• was issued after serving due notice and giving an opportunity to the defendant to present its case;

• is not subject to further appeal;

• is not against Argentine public policy; and

• is not incompatible with another judgment previously or simultaneously issued by an Argentine Court.

In a March 2014 decision, the Supreme Court of Argentina held that the enforcement of a foreign judgment granted to a holder of Untendered Debt (as defined below) for payment of all amount due thereunder did not satisfy one of the requirements set forth in the Code of Civil and Commercial Procedure of the Republic (i.e., that a foreign judgment cannot contravene Argentine law principles of public policy). This ruling was based on the fact that enforcement as requested by the plaintiff would imply that such plaintiff, through an individual action filed before a foreign court, could circumvent the public debt restructuring process set forth by the Government through emergency legislation enacted in accordance with the Argentine Constitution after the debt securities subject to the foreign judgment were issued. In addition, the Supreme Court of Argentina held that such norms were part of Argentine public policy and, therefore, that the enforcement of a foreign judgment, as the one sought by the plaintiff, could not be granted as it would be clearly contrary to such legislation.

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FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. Forward-looking statements are statements that are not historical facts, including statements about the Republic’s beliefs and expectations. These statements are based on the Republic’s current plans, estimates and projections. Therefore, undue reliance should not be placed on such statements. Forward-looking statements speak only as of the date they are made. The Republic undertakes no obligation to update any of them in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. The information contained in this prospectus identifies important factors that could cause such differences. Such factors include, but are not limited to:

• adverse domestic factors, such as:

• increases in inflation;

• increases in domestic interest rates; and

• exchange rate volatility, any of which could lead to lower economic growth or a decrease in Argentina’s international reserves;

• adverse external factors, such as:

• declines in foreign investment, which could deprive the Argentine economy of capital needed for economic growth;

• changes in international prices (including commodity prices) and high international interest rates, either of which could increase Argentina’s current account deficit and budgetary expenditures; and

• recession or low economic growth in Argentina’s trading partners, which could decrease exports from Argentina and the country’s international competitiveness, induce a contraction of the Argentine economy and, indirectly, reduce tax revenues and other public sector revenues and adversely affect the country’s fiscal accounts;

• other adverse factors, such as:

• climatic events; and

• international or domestic hostilities and political uncertainty, including the effects of the mid-term legislative elections to be held in October 2017;

• adverse outcomes in ongoing litigation and arbitration proceedings in several jurisdictions that may lead to new judgments and awards against Argentina, which could have a material adverse effect on Argentina’s economy and financial resources. See “Public Sector Debt—Legal Proceedings.”

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SUMMARY OF THE OFFERS

The following summary highlights information contained elsewhere in this prospectus. It is not complete and may not contain all of the information that you should consider before deciding to tender your Bonds for New Bonds. The Republic encourages you to read this prospectus in its entirety.

The Offers

On April 22, 2016, the Republic issued U.S.$2,750,000,000 of 2019 Bonds, U.S.$4,500,000,000 of 2021 Bonds, U.S.$6,500,000,000 of 2026 Bonds, U.S.$2,750,000,000 of 2046 Bonds; on July 6, 2016, the Republic issued U.S.$1,000,000,000 of 2028 Bonds and U.S.$1,750,000,000 of 2036 Bonds; and on January 26, 2017, the Republic issued U.S.$3,250,000,000 of 2022 Bonds and U.S.$3,750,000,000 of 2027 Bonds, in transactions not subject to the registration requirements of the Securities Act and applicable state securities laws.

The offers relate to the exchange of up to (i) U.S.$2,750,000,000 of the Republic’s registered New 2019 Bonds for an equal aggregate principal amount of 2019 Bonds; (ii) U.S.$4,500,000,000 of the Republic’s registered New 2021 Bonds for an equal aggregate principal amount of 2021 Bonds; (iii) U.S.$6,500,000,000 of the Republic’s registered New 2026 Bonds for an equal aggregate principal amount of 2026 Bonds; (iv) U.S.$2,750,000,000 of the Republic’s registered New 2046 Bonds for an equal aggregate principal amount of 2046 Bonds; (v) U.S.$1,000,000,000 of the Republic’s registered New 2028 Bonds for an equal aggregate principal amount of 2028 Bonds; (vi) U.S.$1,750,000,000 of the Republic’s registered New 2036 Bonds for an equal aggregate principal amount of 2036 Bonds; (vii) U.S.$3,250,000,000 of the Republic’s registered New 2022 Bonds for an equal aggregate principal amount of 2022 Bonds; and (viii) U.S.$3,750,000,000 of the Republic’s registered New 2027 Bonds for an equal aggregate principal amount of 2027 Bonds.

The New Bonds will be the Republic’s obligation and are entitled to the benefits of the Indenture described in “Description of the New Bonds.”

The form and terms of the New 2019 Bonds, New 2021 Bonds, New 2026 Bonds and New 2046 Bonds, are the same as the form and terms of the 2019 Bonds, 2021 Bonds, 2026 Bonds and 2046 Bonds, respectively, except that the New 2019 Bonds, New 2021 Bonds, New 2026 Bonds and New 2046 Bonds, because they have been registered under the Securities Act, are not subject to transfer restrictions and will, therefore, not bear legends restricting their transfer.

The form and terms of the New 2028 Bonds and New 2036 Bonds are the same as the form and terms of the 2028 Bonds and 2036 Bonds, respectively, except that the New 2028 Bonds and New 2036 Bonds, because they have been registered under the Securities Act, are not subject to transfer restrictions and will, therefore, not bear legends restricting their transfer.

The form and terms of the New 2022 Bonds and New 2027 Bonds are the same as the form and terms of the 2022 Bonds and 2027 Bonds, respectively, except that the New 2022 Bonds and New 2027 Bonds, because they have been registered under the Securities Act, are not subject to transfer restrictions and will, therefore, not bear legends restricting their transfer.

Holders of April Bonds and July Bonds may tender their bonds only in a principal amount of U.S.$150,000 and integral multiples of U.S.$1,000 in excess thereof. Holders of January Bonds may tender their bonds only in a principal amount of U.S.$1,000 and integral multiples of U.S.$1,000 in excess thereof.

In addition, after completion of the offers, none of the New Bonds will be entitled to the contingent increases in the interest rate provided by the Registration Rights Agreements. See “The Offers.”

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CUSIP Nos. of Bonds	ISIN Nos. of Bonds	Bonds	Corresponding New Bonds which have been registered under the Securities Act	CUSIP Nos. of New Bonds	ISIN Nos. of New Bonds
Rule 144A 040114 GZ7 Regulation S  P04808 AG9	Rule 144A US040114GZ77 Regulation S USP04808AG92	U.S.$2,750,000,000 6.250% Bonds Due 2019	Up to U.S.$2,750,000,000 6.250% Bonds Due 2019	040114 HB9	US040114HB90
Rule 144A 040114 GQ7 Regulation S  P04808 AA2	Rule 144A US040114GQ78 Regulation S USP04808AA23	U.S.$4,500,000,000 6.875% Bonds Due 2021	Up to U.S.$4,500,000,000 6.875% Bonds Due 2021	040114 GW4	US040114GW47
Rule 144A 040114 GS3 Regulation S  P04808 AC8	Rule 144A US040114GS35 Regulation S USP04808AC88	U.S.$6,500,000,000 7.500% Bonds Due 2026	Up to U.S.$6,500,000,000 7.500% Bonds Due 2026	040114 GX2	US040114GX20
Rule 144A 040114 GU8 Regulation S  P04808 AE4	Rule 144A US040114GU80 Regulation S USP04808AE45	U.S.$2,750,000,000 7.625% Bonds Due 2046	Up to U.S.$2,750,000,000 7.625% Bonds Due 2046	040114 GY0	US040114GY03
Rule 144A 040114 HD5 Regulation S  P04808 AJ3	Rule 144A US040114HD56 Regulation S USP04808AJ32	U.S.$1,000,000,000 6.625% Bonds Due 2028	Up to U.S.$1,000,000,000 6.625% Bonds Due 2028	040114 HF0	US040114HF05
Rule 144A 040114 HE3 Regulation S  P04808 AK0	Rule 144A US040114HE30 Regulation S USP04808AK05	U.S.$1,750,000,000 7.125% Bonds Due 2036	Up to U.S.$1,750,000,000 7.125% Bonds Due 2036	040114 HG8	US040114HG87
Rule 144A 040114 HH6 Regulation S  P04808 AL8	Rule 144A US040114HH60 Regulation S USP04808AL87	U.S.$ 3,250,000,000 5.625% Bonds Due 2022	Up to U.S.$ 3,250,000,000 5.625% Bonds Due 2022	040114 HK9	US040114HK99
Rule 144A 040114 HJ2 Regulation S  P04808 AM6	Rule 144A US040114HJ27 Regulation S USP04808AM60	U.S.$ 3,750,000,000 6.875% Bonds Due 2027	Up to U.S.$ 3,750,000,000 6.875% Bonds Due 2027	040114 HL7	US040114HL72

Resale of the New Bonds

Based on an interpretation by the SEC’s staff set forth in interpretive letters issued to third parties unrelated to the Republic, the Republic believes that the New Bonds issued in the offers may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:

• you are acquiring the New Bonds in the ordinary course of your business;

• you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate in the distribution of the New Bonds; and

• you are not an “affiliate” of the Republic.

If any of the foregoing is not true and you transfer any New Bond without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from the registration requirements of the

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Securities Act, you may incur liability under the Securities Act. The Republic does not assume or indemnify you against this liability.

If you are a broker-dealer and receive New Bonds for your own account in exchange for Bonds that you acquired as a result of market making or other trading activities, you must acknowledge that you will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the New Bonds. A broker-dealer may use this prospectus for an offer to resell, resale or other transfer of the New Bonds.

Expiration Date

The offers will expire at 5:00 p.m., New York City time, on April 12, 2017, unless the Republic decides to extend the expiration date, in which case the term “expiration date” means the latest date and time to which the Republic extends the offers.

The Republic will accept for exchange any and all Bonds that you properly tender in the offers before 5:00 p.m., New York City time, on the expiration date. If the Republic decides for any reason not to accept any Bonds you have tendered for exchange, those Bonds will be returned to you without cost promptly after the expiration date.

Interest on the New Bonds

• Interest on the New 2019 Bonds will be payable semiannually on April 22 and October 22 of each year at the rate of 6.250% per annum. Interest on the New 2019 Bonds will accrue from the last interest payment date on which interest was paid on the 2019 Bonds.

• Interest on the New 2021 Bonds will be payable semiannually on April 22 and October 22 of each year at the rate of 6.875% per annum. Interest on the New 2021 Bonds will accrue from the last interest payment date on which interest was paid on the 2021 Bonds.

• Interest on the New 2026 Bonds will be payable semiannually on April 22 and October 22 of each year at the rate of 7.500% per annum. Interest on the New 2026 Bonds will accrue from the last interest payment date on which interest was paid on the 2026 Bonds.

• Interest on the New 2046 Bonds will be payable semiannually on April 22 and October 22 of each year at the rate of 7.625% per annum. Interest on the New 2046 Bonds will accrue from the last interest payment date on which interest was paid on the 2046 Bonds.

• Interest on the New 2028 Bonds will be payable semiannually on January 6 and July 6 of each year at the rate of 6.625% per annum. Interest on the New 2028 Bonds will accrue from the last interest payment date on which interest was paid on the 2028 Bonds.

• Interest on the New 2036 Bonds will be payable semiannually on January 6 and July 6 of each year at the rate of 7.125% per annum. Interest on the New 2036 Bonds will accrue from the last interest payment date on which interest was paid on the 2036 Bonds.

• Interest on the New 2022 Bonds will be payable semiannually on January 26 and July 26 of each year at the rate of 5.625% per annum. Interest on the New 2022 Bonds will accrue from the last interest payment date on which interest was paid on the 2022 Bonds.

• Interest on the New 2027 Bonds will be payable semiannually on January 26 and July 26 of each year at the rate of 6.875% per annum. Interest on the New 2027 Bonds will accrue from the last interest payment date on which interest was paid on the 2027 Bonds.

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Termination of the Offers

The Republic may terminate the offers and refuse to accept any Bonds for exchange if the Republic determines that its ability to proceed with the offers could be materially impaired due to:

• any injunction, order or decree by any court or governmental agency, including a stop order by the Securities and Exchange Commission, or SEC, with respect to the registration statement, or any new law, statute, rule or regulation;

• any interpretation of the staff of the SEC of any existing law, statute, rule or regulation; or

• the failure to obtain any necessary approvals of governmental agencies or holders of the Bonds.

Holders of Bonds will have certain rights against the Republic under the Registration Rights Agreements if it fails to complete the offers.

Procedures for Tendering Bonds

If you wish to accept the offer, you must deliver electronically your acceptance together with your Bonds through DTC’s Automated Tender Offer Program (ATOP) system.

If you are not a direct participant in DTC, you must, in accordance with the rules of the DTC participant who holds your securities, arrange for a direct participant in DTC to submit your acceptance to DTC electronically.

By accepting the offer and tendering your Bonds, you will represent to the Republic and to the agent, to the extent applicable, and acknowledge, as applicable, that, among other things:

• you have received the prospectus;

• you have appointed the agent as your agent for the limited purposes of (i) receiving and holding, solely for your benefit and on your behalf, the tendered Bonds; (ii) receiving the relevant New Bonds and delivering them to you in exchange for your Bonds accepted by the Republic for exchange and cancellation; and (iii) holding the relevant New Bonds for your exclusive benefit and the Republic shall have no interest whatsoever, including any reversionary interest, in such New Bonds;

• by tendering your Bonds, you are instructing the agent to cause the trustee to simultaneously cancel the surrendered Bonds, upon the Republic’s acceptance of your tender;

• the New Bonds you acquire in the offers are being acquired in the ordinary course of business or, if another person will receive the New Bonds, in the ordinary course of that person’s business;

• neither you nor any other person who will receive the New Bonds has or intends to have an arrangement or understanding with any person to participate in the distribution of the New Bonds;

• neither you nor any other person who will receive the New Bonds is an “affiliate,” as defined in Rule 405 of the Securities Act, of the Republic, or if you or the person who will receive the New Bonds is an affiliate under this definition, that you or that person will comply with the applicable registration and prospectus delivery requirements of the Securities Act; and

• if you are a broker-dealer, that you acquired the Bonds as a result of market making activities or other trading activities.

See “The Offers—Holders’ Deemed Representations, Warranties and Undertakings.”

The Registration Rights Agreements requires us to file a registration statement for an offering to be made on a continuous basis by the terms of Rule 415 under the Securities Act in respect of the Bonds of any holder that is

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not eligible to participate in the offers or does not receive freely tradable New Bonds in the offers and requests to have its Bonds registered under the Securities Act.

Withdrawal Rights

You may withdraw the tender of your Bonds at any time prior to 5:00 p.m., New York City time, on the expiration date. To withdraw, you must send a written notice of withdrawal to the agent through the electronic submission of a message in accordance with the procedures of DTC’s ATOP system by 5:00 p.m., New York City time, on the expiration date.

Tendered Bonds

Pending cancellation of the Bonds that have been transferred to the agent’s account at the book-entry transfer facility system maintained by DTC, the Bonds will be held for your exclusive benefit and the Republic shall have no interest whatsoever in such Bonds.

Acceptance of Bonds and Delivery of New Bonds

If all of the conditions to the offers are satisfied or waived, we will accept any and all Bonds that are properly tendered in the offers on or prior to 5:00 p.m., New York City time, on the expiration date. We will deliver the New Bonds promptly after the expiration date.

Tax Considerations

The Republic believes that the exchange of your Bonds will not be a taxable exchange for U.S. federal income tax purposes. You should consult your tax adviser about tax consequences of the offers as they apply to your individual circumstances. See “Taxation—United States Federal Taxation.”

Agent

The Bank of New York Mellon is serving as agent in connection with the offers.

Consequences of Failure to Participate in the Offers

If you do not tender your Bonds, they will, following the completion of the offers, continue to be subject to the existing restrictions upon their transfer. The Republic will have no further obligation to provide for the registration under the Securities Act of these Bonds nor any other obligation under the Registration Rights Agreements. The liquidity of the market for your Bonds could be adversely affected when the Republic completes the offers if you do not participate in the offers.

Use of Proceeds

The Republic will not receive any cash proceeds from the issuance of the New Bonds under the offers. See “Use of Proceeds.”

Fees and Expenses

The Republic will bear certain expenses incidental to consummating the offers and complying with the Registration Rights Agreements. It will not pay any broker-dealer commissions or concessions.

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THE NEW BONDS

The following is a brief summary of some of the terms of these Offers. It is not complete and may not contain all the information that you should consider before tendering your Bonds in exchange for New Bonds. For a more complete description of the terms of the New Bonds, see “Description of the New Bonds” in this prospectus.

Issuer The Republic of Argentina.

Terms of the New Bonds The terms of the New Bonds are identical to the terms of the Bonds, except for the transfer restrictions and registration rights relating to the Bonds.

New Bonds

New 2019 Bonds Up to U.S.$2,750,000,000 aggregate principal amount of 6.250% Bonds due 2019.

New 2021 Bonds Up to U.S.$4,500,000,000 aggregate principal amount of 6.875% Bonds due 2021.

New 2026 Bonds Up to U.S.$6,500,000,000 aggregate principal amount of 7.500% Bonds due 2026.

New 2046 Bonds Up to U.S.$2,750,000,000 aggregate principal amount of 7.625% Bonds due 2046.

New 2028 Bonds Up to U.S.$1,000,000,000 aggregate principal amount of 6.625% Bonds due 2028.

New 2036 Bonds Up to U.S.$1,750,000,000 aggregate principal amount of 7.125% Bonds due 2036.

New 2022 Bonds Up to U.S.$3,250,000,000 aggregate principal amount of 5.625% Bonds due 2022.

New 2027 Bonds Up to U.S.$3,750,000,000 aggregate principal amount of 6.875% Bonds due 2027.

Maturity

New 2019 Bonds April 22, 2019

New 2021 Bonds April 22, 2021

New 2026 Bonds April 22, 2026

New 2046 Bonds April 22, 2046

New 2028 Bonds July 6, 2028

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New 2036 Bonds July 6, 2036

New 2022 Bonds January 26, 2022

New 2027 Bonds January 26, 2027

Interest

New 2019 Bonds Interest on the New 2019 Bonds will accrue at a rate of 6.250% per annum, from the most recent payment date on which interest on the 2019 Bonds has been paid; be payable semi-annually in arrears on April 22 and October 22 of each year, beginning April 22, 2017, to persons in whose names the New 2019 Bonds are registered at the close of business on April 7 and October 7 of each year, respectively; and be computed on the basis of a 360-day year comprised of twelve 30-day months, and in the case of an incomplete month, the number of days elapsed.

New 2021 Bonds Interest on the New 2021 Bonds will accrue at a rate of 6.875% per annum, from the most recent payment date on which interest on the 2021 Bonds has been paid; be payable semi-annually in arrears on April 22 and October 22 of each year, beginning April 22, 2017, to persons in whose names the New 2021 Bonds are registered at the close of business on April 7 and October 7 of each year, respectively; and be computed on the basis of a 360-day year comprised of twelve 30-day months, and in the case of an incomplete month, the number of days elapsed.

New 2026 Bonds Interest on the New 2026 Bonds will accrue at a rate of 7.500% per annum, from the most recent payment date on which interest on the 2026 Bonds has been paid; be payable semi-annually in arrears on April 22 and October 22 of each year, beginning April 22, 2017, to persons in whose names the New 2026 Bonds are registered at the close of business on April 7 and October 7 of each year, respectively; and be computed on the basis of a 360-day year comprised of twelve 30-day months, and in the case of an incomplete month, the number of days elapsed.

New 2046 Bonds Interest on the New 2046 Bonds will accrue at a rate of 7.625% per annum, from the most recent payment date on which interest on the 2046 Bonds has been paid; be payable semi-annually in arrears on April 22 and October 22 of each year, beginning April 22, 2017, to persons in whose names the New 2046 Bonds are registered at the close of business on April 7 and October 7 of each year, respectively; and be computed on the basis of a 360-day year comprised of twelve 30-day months, and in the case of an incomplete month, the number of days elapsed.

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New 2028 Bonds Interest on the New 2028 Bonds will accrue at a rate of 6.625% per annum, from the most recent payment date on which interest on the 2028 Bonds has been paid; be payable semi-annually in arrears on January 6 and July 6 of each year, beginning July 6, 2017, to persons in whose names the New 2028 Bonds are registered at the close of business on January 5 and July 5 of each year, respectively; and be computed on the basis of a 360-day year comprised of twelve 30-day months, and in the case of an incomplete month, the number of days elapsed.

New 2036 Bonds Interest on the New 2036 Bonds will accrue at a rate of 7.125% per annum, from the most recent payment date on which interest on the 2036 Bonds has been paid; be payable semi-annually in arrears on January 6 and July 6 of each year, beginning July 6, 2017, to persons in whose names the New 2036 Bonds are registered at the close of business on January 5 and July 5 of each year, respectively; and be computed on the basis of a 360-day year comprised of twelve 30-day months, and in the case of an incomplete month, the number of days elapsed.

New 2022 Bonds Interest on the New 2022 Bonds will accrue at a rate of 5.625% per annum, from January 26, 2017 (or from the most recent payment date on which interest has been paid); be payable semi-annually in arrears on January 26 and July 26 of each year, beginning on July 26, 2017, to persons in whose names the New 2022 Bonds are registered at the close of business on January 25 and July 25 of each year, respectively; and be computed on the basis of a 360-day year comprised of twelve 30-day months, and in the case of an incomplete month, the number of days elapsed.

New 2027 Bonds Interest on the New 2027 Bonds will accrue at a rate of 6.875% per annum, from January 26, 2017 (or from the most recent payment date on which interest has been paid); be payable semi-annually in arrears on January 26 and July 26 of each year, beginning on July 26, 2017, to persons in whose names the New 2027 Bonds are registered at the close of business on January 25 and July 25 of each year, respectively; and be computed on the basis of a 360-day year comprised of twelve 30-day months, and in the case of an incomplete month, the number of days elapsed.

Status The New Bonds will constitute direct, general, unconditional and unsubordinated obligations of the Republic for which the full faith and credit of the Republic is pledged. The New Bonds rank and will rank without any preference among themselves and equally with all other unsubordinated public external indebtedness (as defined below) of the Republic. It is understood that this provision will not be construed so as to require the Republic to make payments under any series of the New Bonds ratably with payments being made under any other public external indebtedness. See “Description of the New Bonds—Status.”

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Additional Amounts The Republic will make all principal, premium (if any) and interest payments on the New Bonds without deducting or withholding on account of any present or future taxes, duties, assessments or other governmental charges withheld or assessed by the Republic or any political subdivision or authority thereof or therein having power to tax, unless the deduction or withholding is required by law. If the Republic is required to make any deduction or withholding, it will pay the holders, subject to specified exceptions, the additional amounts required to ensure that the net amount they receive after such withholding or deduction shall equal the amount they would have received without this withholding or deduction. See “Description of the New Bonds—Additional Amounts.”

Further Issues The Republic may, from time to time, without the consent of holders, create and issue additional debt securities having the same terms and conditions as any series of the New Bonds in all respects, except for issue date, issue price, original interest accrual date and the first interest payment on the debt securities; provided, however, that any additional debt securities subsequently issued shall be issued, for U.S. federal income tax purposes, either (a) as part of the “same issue” as such New Bonds or (b) in a “qualified reopening” of such New Bonds, unless such additional debt securities have a separate CUSIP, ISIN or other identifying number from such New Bonds. Such additional debt securities will be consolidated with and will form a single series with such New Bonds.

Settlement; Form The New Bonds to be delivered to investors will be issued in global form and registered in the name of the clearing system or its nominee or custodian. Clearing systems include DTC in the United States and Euroclear and Clearstream, Luxembourg in Europe. See “Description of the New Bonds.”

Prescription Claims against the Republic for the payment of principal and interest, premium, if any, or other amounts due on the New Bonds will be prescribed unless made within five years, with respect to principal, and two years, with respect to interest, premium, if any, or other amounts due on the New Bonds, in each case from the date on which such payment first became due, or a shorter period if provided by law.

Governing Law The New Bonds will be, and the Indenture is, governed by and construed in accordance with the laws of the State of New York, except with respect to the authorization and execution of the New Bonds and the Indenture by and on behalf of Argentina, which shall be governed by the laws of Argentina.

Listing Application is expected to be made to list the New Bonds on the MERVAL and to have them admitted for trading on the Argentine MAE.

Luxembourg Agent The Bank of New York Mellon (Luxembourg) S.A.

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CUSIP/ISIN The New Bonds offered hereby will have the relevant trading information set forth in the following table.

New Bonds	CUSIP Nos. of New Bonds	ISIN Nos. of New Bonds
Up to U.S.$2,750,000,000  6.250% Bonds Due 2019	040114 HB9	US040114HB90
Up to U.S.$4,500,000,000  6.875% Bonds Due 2021	040114 GW4	US040114GW47
Up to U.S.$6,500,000,000  7.500% Bonds Due 2026	040114 GX2	US040114GX20
Up to U.S.$2,750,000,000  7.625% Bonds Due 2046	040114 GY0	US040114GY03
Up to U.S.$1,000,000,000  6.625% Bonds Due 2028	040114 HF0	US040114HF05
Up to U.S.$1,750,000,000  7.125% Bonds Due 2036	040114 HG8	US040114HG87
Up to U.S.$ 3,250,000,000  5.625% Bonds Due 2022	040114 HK9	US040114HK99
Up to U.S.$ 3,750,000,000  6.875% Bonds Due 2027	040114 HL7	US040114HL72

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USE OF PROCEEDS

The Republic will not receive any cash proceeds from the issuance of the New Bonds offered in the offers. In consideration for issuing the New Bonds as contemplated in this prospectus, the Republic will receive in exchange Bonds in an equal principal amount. The Bonds surrendered in exchange for the New Bonds will be retired and cancelled and cannot be reissued. Accordingly, the issuance of the New Bonds will not result in any change in the Republic’s indebtedness.

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RECENT DEVELOPMENTS

The information contained in this section supplements the information about Argentina corresponding to the headings below that are contained in this prospectus. This information is not necessarily indicative of the Argentine economy or fiscal results for the full year or any other period. You should read the following discussion of recent developments together with the more detailed information appearing elsewhere in this prospectus.

THE REPUBLIC OF ARGENTINA

Government

Judicial System

Following the retirement of two justices, President Macri nominated Mr. Horacio Daniel Rosatti and Mr. Carlos Fernando Rosenkrantz to the Supreme Court. Both nominees were confirmed by the Senate in June 2016. The Supreme Court has five confirmed sitting justices.

Ministry of the Treasury and Ministry of Finance

In December 2016, Mr. Alfonso Prat Gay, who had been appointed as Minister of the Treasury and Public Finance when President Macri took office, resigned from his position effective as of December 31, 2016. Following his resignation, the Macri administration decided to divide the former Ministry of the Treasury and Public Finance into two ministries, appointing Mr. Nicolas Dujovne as Minister of the Treasury (Ministro de Hacienda) and Mr. Luis Caputo as Minister of Finance.(Ministro de Finanzas).

Foreign Affairs and International Organizations

On March 11, 2016, the United Nations Commission on the Limits of the Continental Shelf (the “CLCS”) unanimously approved a recommendation that expanded Argentina’s maritime territory in the South Atlantic Ocean (the “CLCS Recommendation”). The surface area within the designated limits covers approximately 0.7 million square miles—the equivalent of nearly 35% of Argentina’s territory.

Under the 1982 United Nations Convention on the Law of the Sea, CLCS recommendations to coastal states on matters related to the establishment of the outer limits of their continental shelf are not binding, but the limits of the continental shelf established by a coastal state based on such recommendations are final and binding.

The CLCS Recommendation has not been contested by any other country or territory. Argentina’s submission to the CLCS regarding the outer limit of its continental shelf comprised the continental, insular and Antarctic territory. The CLCS, however, postponed the analysis of any areas that are the subject of controversy with the United Kingdom as well as any portion of Argentina’s continental shelf that overlaps with territories that fall within the scope of the Antarctic Treaty dated December 1, 1959 (as amended), to which Argentina is a party. Consequently, the recommendation does not cover such areas.

The CLCS Recommendation and Argentina’s affirmation of rights over the extended continental shelf are expected to have a beneficial economic impact insofar as, according to Article 77 of the United Nations Convention on the Law of the Sea, the coastal state has sovereign rights over the continental shelf with respect to exploration and exploitation of natural resources.

On October 11 2016, Argentina and Chile’s double taxation treaty entered into force, after Argentina notified Chile that its internal requirements had been satisfied.

On November 9, 2016, the IMF concluded the Article IV Consultation with Argentina. Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. IMF

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staff visit the country, collect economic and financial information, and discuss the country’s economic developments and policies with officials. The IMF staff then prepare a report, which forms the basis for discussion by the Executive Board. The most recent Article IV Consultation with Argentina took place in July 2006. The report is publicly available on the IMF’s website at http://www.imf.org/external/pubs/cat/longres.aspx?sk=44386. The contents of this website are not intended to be incorporated by reference into this prospectus.

On November 16, 2016, Argentina and Switzerland signed a declaration agreeing to the automatic exchange of tax-related information and a memorandum of understanding regarding the existing double taxation treaty between both countries in relation to certain taxes, such as income taxes and wealth taxes, which includes mechanisms to avoid abuses of the system through tax evasion.

In December 2016, Argentina and the United States signed a tax information agreement that seeks to combat tax evasion and promote transparency.

As of the date of this prospectus, Argentina is working towards negotiating free trade agreements with the European Union and the United States (the free trade agreements are being negotiated via the Latin American trade block MERCOSUR).

THE ARGENTINE ECONOMY

Macri Administration: 2015-Present

Presidential and congressional elections in Argentina took place on October 25, 2015, and a runoff election between the two leading presidential candidates was held on November 22, 2015, resulting in Mr. Mauricio Macri (from the Cambiemos coalition) being elected President of Argentina. The Macri administration assumed office on December 10, 2015.

Since assuming office, the Macri administration has announced and executed several significant economic and policy reforms, including:

• Foreign exchange reforms. The Macri administration eliminated a substantially all of the foreign exchange restrictions, including certain currency controls, that were imposed by the Fernández de Kirchner administration. These reforms are expected to provide greater flexibility and easier access to the foreign exchange market (MULC). See “Exchange Rates and Exchange Controls—Exchange Controls” for a description of the principal measures adopted as of the date of this prospectus.

• INDEC reforms. On January 8, 2016, based on its determination that the INDEC had failed to produce reliable statistical information, particularly with respect to CPI, GDP, poverty and foreign trade data, the Macri administration declared a state of administrative emergency for the national statistical system and the INDEC until December 31, 2016. As of the date of this prospectus, the INDEC has published certain revised data, including the CPI for May, June, July, August, September, October, November and December 2016, and January and February 2017, and foreign trade and balance of payment statistics. On June 29, 2016, the INDEC published the INDEC Report including revised GDP data for the years 2004 through 2015. On September 22, 2016, the INDEC resumed publication of its essential goods and services basket assessment. On November 9, 2016, the IMF Executive Board lifted its censure on the Republic, noting that the Republic had resumed the publication of data in a manner consistent with its obligations under the Articles of Agreement of the IMF. For more information, see “Presentation of Statistical and Other Information—Certain Methodologies.”

• Access to Public Information Act. On September 14, 2016, Congress passed Law No. 27,275, which establishes the right to access certain information of, among others, the Government, the attorney general’s office, the Judiciary Council, Congress, the Central Bank, entities owned by the Argentine state, institutions or funds administered by the Government and business organizations or trusts that have received public funds.

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• Financial policy. Soon after taking office, the Macri administration sought to settle the outstanding claims with the holders of Untendered Debt, and the Minister of the Treasury designed a debt restructuring and cancellation program with the aim of reducing the amount of outstanding Untendered Debt. In February 2016, the Republic entered into agreements in principle to settle outstanding claims with certain holders of Untendered Debt and put forward a proposal to other holders of Untendered Debt, including those with pending claims in U.S. courts, subject to two conditions: obtaining approval by the Argentine Congress and lifting the pari passu injunctions. On March 2, 2016, the District Court agreed to vacate the pari passu injunctions, subject to two conditions: first, the repealing of all legislative obstacles to settlement with holders of Untendered Debt, and second, full payment to holders of pari passu injunctions with whom the Government had entered into agreements in principle on or before February 29, 2016, in accordance with the specific terms of such agreements. On April 13, 2016, the District Court’s order was affirmed by the Second Circuit Court of Appeals. On March 31, 2016, the Argentine Congress repealed the legislative obstacles to the settlement and approved the Settlement Proposal. Argentina closed the April 2016 Transaction on April 22, 2016 and applied U.S.$9.3 billion of the net proceeds to satisfy settlement payments on agreements of holders of approximately U.S.$4.2 billion principal amount of Untendered Debt. Upon confirmation that the conditions set forth in its March 2, 2016 order had been satisfied, the District Court ordered the vacatur of all pari passu injunctions.

Since April 2016, Argentina has continued settling claims with holders of Untendered Debt consistent with the terms of its February 2016 settlement proposal. As of December 31, 2016, the outstanding principal amount of Untendered Debt that was not subject to a settlement agreement totaled approximately U.S.$.1.51 billion.

On December 22, 2016, in a case involving certain creditors that had not responded to the February 2016 settlement proposal and alleged a continued violation of the pari passu clause, the District Court found that no continued pari passu violation existed although the plaintiffs’ bonds remained unpaid while Argentina was paying its consenting creditors as well as the newly issued bonds. In its ruling, the District Court also found that under New York law claims relating to Untendered Debt governed by New York law become time-barred after six years.

• Foreign Currency-Denominated Bonds. Since the April 2016 Transaction, Argentina has issued foreign currency-denominated bonds in aggregate amounts of U.S.$9.75 billion and €2.5 billion under foreign law and reopened securities issued under local law for a total of U.S.$1.9 billion. In addition, Argentina accessed the domestic US-dollar market by issuing Treasury bonds (LETES), of which U.S.$9.7 billion were outstanding as of February 20, 2017.

• Foreign trade reforms. The Kirchner and Fernández de Kirchner administrations imposed export duties and other restrictions on several sectors, particularly the agricultural sector. The Macri administration eliminated export duties on wheat, corn, beef, mining, oil and regional products, and reduced the duty on soybean exports by 5%, from 35% to 30%. A 5% export duty on most industrial exports was also eliminated. On February 17, 2017, Macri administrarion eliminated import duties on computers, computers parts and complements (such as printers and digitizers) from 35% to 0%. With respect to payments for imports of goods and services to be performed abroad, the Macri administration eliminated the restrictions on access to the MULC. In addition, importers were offered short-term debt securities issued by the Republic to be used to repay outstanding commercial debt for the import of goods.

• Fiscal policy. The Macri administration took steps to anchor the fiscal accounts, to reduce the primary fiscal deficit, and pursued a primary fiscal deficit target of 4.8% of GDP in 2016 through the elimination of subsidies, the reorganization of certain expenditures and the generation of increased revenue through the Tax Amnesty. The Macri administration’s ultimate aim is to achieve a balanced primary budget by 2019.

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• Correction of monetary imbalances. The Macri administration announced the adoption of an inflation targeting regime in parallel with the floating exchange rate regime and set inflation targets for the next four years, including a band of 20-25% for 2016. The Central Bank has increased sterilization efforts to reduce excess monetary imbalances and raised peso interest rates to offset inflationary pressure. Inflation from December 2015 to December 2016, as measured by City of Buenos Aires, stood at 41.0%. Inflation from May to December 2016, as measured by INDEC, stood at 16.9%. In January 2017, the Central Bank used the 7-day repo reference rate as the anchor of its inflation targeting regime. Short term notes issued by the Central Bank ( LEBACs) would be used to manage liquidity.

• National electricity state of emergency and reforms. Following years of very limited investment in the energy sector, as well as the continued freeze on electricity and natural gas tariffs since the 2001-2002 economic crisis, Argentina began to experience energy shortages in 2011. In response to the growing energy crisis, the Macri administration declared a state of emergency with respect to the national electricity system, which will remain in effect until December 31, 2017. The state of emergency allows the Government to take actions designed to ensure the supply of electricity to the country, such as instructing the Ministry of Energy and Mining to design and implement, with the cooperation of all federal public entities, a coordinated program to guarantee the quality and security of the electricity system. In addition, through Resolution No. 6/2016 of the Ministry of Energy and Mining and Resolution No. 1/2016 of the Ente Nacional Regulador de la Electricidad (National Electricity Regulatory Agency), the Macri administration announced the elimination of a portion of energy subsidies currently in effect and a substantial increase in electricity rates. As a result, average electricity prices have already increased and could increase further. By correcting tariffs, modifying the regulatory framework and reducing the Government’s role as an active market participant, the Macri administration sought to correct distortions in the energy sector and stimulate investment. However, certain of the Government’s initiatives were challenged in the Argentine courts and resulted in judicial injunctions or rulings limiting the Government’s initiatives.

During 2016, lower court injunctions suspended in certain provinces and cities end-user electricity tariff increases implemented as of February 1, 2016, and instructed the Ministry of Energy and Mining and the National Electricity Regulating Agency (the Ente Nacional Regulador de la Electricidad or “ENRE”) to conduct a non-binding public hearing prior to sanctioning any such increases. On October 28, 2016, a non-binding public hearing was conducted by the Ministry of Energy and Mining and ENRE to present tariff proposals submitted by distribution companies covering the greater Buenos Aires area (approximately 15 million inhabitants) for the 2017-2021 period in the framework of the Integral Tariff Review (as defined below). On December 14, 2016, eight non-binding public hearings (in Buenos Aires, Mendoza, Neuquén, Mar del Plata, Formosa, Santiago del Estero and Puerto Madryn) were conducted by the Ministry of Energy and Mining and ENRE to present tariff proposals for electricity transmission at the national and regional level and the seasonal reference prices of capacity and energy in the wholesale electricity market, as well as a proposal to reduce subsidies for the 2017-2021 period. The determination of the final tariffs and reference prices is pending.

• Tariff increases. With the aim of encouraging companies to invest and improve the services they offer and enabling the Government to assist those in need, the Macri administration has begun updating the tariffs for electricity, transportation, gas and water services (the “Integral Tariff Review”). Each of the announced tariff increases contemplates a tarifa social (social tariff), which is designed to provide support to vulnerable groups, including beneficiaries of social programs, retirees and pensioners that receive up to two minimum pensions, workers that receive up to two minimum salaries, individuals with disabilities, individuals registered in the Monotributo Social program, domestic workers and individuals receiving unemployment insurance. Subsequent modifications to these announced tariff increases were made, including a 20% discount on the regular distribution price for 400 designated energy-intensive companies that purchase electricity directly from distributors.

On August 18, 2016, the Supreme Court of Argentina in “Centro de Estudios para la Promoción de la Igualdad y la Solidaridad v/ Ministry of Energy and Mining,” affirmed lower court injunctions

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suspending end-user natural gas tariff increases sanctioned as of April 1, 2016, and instructed the Ministry of Energy and Mining and ENARGAS to conduct a non-binding public hearing prior to sanctioning any such increases. On September 16, 2016, a non-binding public hearing was conducted by the Ministry of Energy and Mining and ENARGAS to submit (i) transitional tariffs for transportation and distribution of natural gas at the national level in the framework of the Integral Tariff Review for the period 2017-2021, (ii) a new set of gas prices at the Point of Entry to the Transportation System (PIST) and (iii) a proposal to reduce subsidies for the period 2016-2022. Between October 2 and 7, 2016, public hearings were also conducted at the national level with regard to tariff proposals for gas transportation and distribution throughout the country for the period 2017-2021 in the framework of the Integral Tariff Review.

On October 6 and 7, 2016, after conducting non-binding public hearings, the Ministry of Energy and Mining and ENARGAS published a new end-user gas tariff scheme. The scheme establishes a two tariff schedule for private residences, establishing lower tariffs for units that decreased consumption compared to the same period in the previous year by at least 15%.

On October 11, 2016, the Ministry of Energy and Mining (a) expanded the amount of eligible beneficiaries of social tariffs to include retirees and pensioners that receive pensions equal to up to two minimum salaries, certain war veterans and medically dependent customers, and (b) decreed that institutions that perform activities of public interest would be entitled to residential rates.

The year-on-year increase in the price of energy in the wholesale electricity market for end-users, which excludes transportation and distribution costs and accounts for approximately 45% of the tariff to end-users in the City of Buenos Aires, totaled 233% (from Ps.96/MWh to Ps.320/MWh on average), while the increase in the price of natural gas for end-users was 68% (from Ps.37/MMBtu to Ps.62/MMBtu on average).

• Retiree Programs. On June 29, 2016, Congress passed a bill approving the Historical Reparations Program for Retirees and Pensioners, which took effect upon its publication in the official gazette. The main aspects of this program, which is designed to conform government social security policies to Supreme Court rulings, include (i) payments to more than two million retirees and the retroactive compensation of more than 300,000 retirees and (ii) the creation of a pensión universal (universal pension) for the elderly, which guarantees an income for all individuals over 65 years of age who are otherwise ineligible for retirement. The Historical Reparations Program for Retirees and Pensioners will give retroactive compensation to retirees in an aggregate amount of more than Ps. 47.0 billion and involve expenses of up to Ps. 75.0 billion to cover all potential beneficiaries. The bill provides that assets held by the FGS, including equity interests, may be sold to finance this program.

• Tax Amnesty Law. In July 2016, the Régimen de Sinceramiento Fiscal (the Tax Amnesty Law) was introduced to promote the voluntary declaration of assets by Argentine residents (the “Tax Amnesty Law”). The law allows Argentine tax residents holding undeclared funds or assets located in Argentina or abroad to (i) declare such property until March 31, 2017 without facing prosecution for tax evasion or being required to pay outstanding tax liabilities on the assets, provided they can provide evidence that the assets were held by certain specified cut-off dates, and (ii) keep the declared property outside Argentina and not repatriate such property to Argentina. In the case of cash that was not deposited in bank accounts by the specified cut-off dates, such amounts have to be disclosed by October 31, 2016 and deposited by November 21, 2016 in special accounts opened at Argentine financial entities. As of December 31, 2016, assets totaling approximately, Ps.106.8 billion had been declared.

Depending on the amount declared, how soon it is declared, the election to subscribe for certain investment securities and the payment method used, those who take advantage of the law will pay a special tax of between 0 and 15% on the total amount declared. Alternatively, they can invest an equivalent amount in government bonds or a fund that will finance, among other things, public infrastructure projects and small to medium-sized businesses in general. The special tax rate is set as follows: (i) undeclared assets below Ps. 305,000: 0%, (ii) undeclared assets between Ps. 305,000 and

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Ps. 800,000: 5% on the value of the assets, (iii) undeclared assets (except property) in excess of Ps. 800,000, if declared before December 31, 2016: 10% and if declared after December 31, 2016 and until March 31, 2017: 15% on the value of assets. Taxpayers may elect to subscribe for certain investment securities and reduce the tax rates payable upon disclosure of previously undisclosed assets.

On October 31, 2016, the Ministry of the Treasury and Public Finances and the Argentine Revenue Service Agency (the Agencia Federal de Ingresos Públicos or “AFIP”) announced that through that date, which was the end of the first stage of the Tax Amnesty Law implementation, U.S.$4.6 billion cash holdings had been declared. In addition, the cut-off date for depositing declared cash amounts was extended through November 21, 2016.

On November 21, 2016, the Ministry of Finance and the AFIP announced that, through that date, which was the end of the second stage of the Tax Amnesty Law implementation, U.S.$7.2 billion in cash holdings had been declared. On December 27, 2016, the Ministry of Finance and the AFIP announced that, through that date, U.S.$ 97.8 billion in cash holdings, real estate and securities had been declared.

• Social Measures. On April 16, 2016, President Macri announced a series of measures intended to alleviate the impact of adverse conditions of certain social sectors, including:

• the eligibility of over half a million children of self-employed individuals to receive the same allowances as those provided to employed workers. In addition, temporary workers will receive allowances throughout the year, including for the months they are not employed;

• the harmonization of Asignación Universal por Hijo (Universal Child Allowance) with local programs to permit eligibility for more than one program;

• a bill, which was approved by Congress on June 8, 2016, to refund up to Ps. 300 per month in VAT paid on the purchase of certain staples (such as food, clothing and cleaning supplies) by retirees that receive minimum pensions and individuals receiving the Universal Child or pregnancy allowance; this limit will be adjusted based on the variation of the prices;

• a one-time allowance of Ps. 500 for retirees receiving minimum pensions and individuals receiving the Universal Child Allowance; and

• a 20% increase in amounts paid under the Plan Argentina Trabaja program (Argentine Jobs Program) and Ellas Hacen (Women Make) program and an increase in the limit on annual income, from Ps. 48,000 to Ps. 72,000, for those eligible for the Monotributo Social program.

In addition, on December 14, 2016, Congress approved Law No. 27,345, which among other measures, declared a social emergency until December 31, 2019.

• Precios Cuidados and Precios Claros. The Government also announced modifications to the Precios Cuidados program, which was originally launched in January 2014 to establish price controls on a broad range of basic household and other products. The new program ran from September 6, 2016 to January 6, 2017, and was further extended until December 31, 2017, and includes fresh products such as fruits, vegetables and certain meats. The Precios Claros program was implemented to allow consumers to compare prices between hundreds of supermarket products. For more information, see “—Poverty and Income Distribution.”

• Public Bid Process for New Renewable Energy Generation Units. On March 22, 2016, the Secretariat of Energy called for bids to install 1,000 MW of new renewable energy units (the “RenovAR Program”). This bid process is governed by Law No. 27,191 and Decree No. 531/16, which encouraged the increase of energy generation from renewable sources by providing, among other things, significant tax benefits. On September 5, 2016, bids for a total of 6,366 MW were presented under the first round of this renewable energy bidding process. Bids submitted under this first round included 49 distinct wind energy projects totaling 3,468 MW and 58 distinct solar energy projects totaling 2,834 MW. Bids were also submitted for 11 biomass-biogas projects totaling 53 MW and 5 small hydroelectric projects

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totaling 11 MW. On October 7, 2016, the winning bids for the first round of the RenovAR Program to incorporate 1,109 MW of electricity generated from renewable sources were announced. Twelve wind energy projects were awarded for 708 MW, four solar energy projects for 400 MW and one biomass-biogas project for 1 MW.

On October 31, 2016, the Ministry of Energy and Mining, by means of Resolution 252/2016, launched round 1.5 of the RenovAR Program as a continuation of round 1. This follow-up round allowed participants to resubmit their bids with a new price. The Ministry of Energy and Mining indicated that it would award new projects if, among other conditions, the price was below the U.S.$59.39 MWh threshold for wind projects (the weighted average price of projects awarded in round 1). On November 25, 2016, the Ministry finalized the auction process for the installation of new renewable energy units and, under Resolution 281/2016, granted awards in the amount of 1,281.5 MW, with an average price of U.S.$53.98 per MWh, including wind energy projects and 20 solar energy projects.

• Strengthening of Regional Economies. On October 3, 2016, the Government announced a plan to strengthen regional economies. The plan is expected to include increased reimbursements for exports of regional products, policies to improve disease control operations performed by the Servicio Nacional de Sanidad y Calidad Agroalimentaria (SENASA) and the creation of a new fund to provide credit for agroindustrial investment.

• Aviation Sector Development. On September 21, 2016, the Government announced its “Plan Integral” (Comprehensive Plan) construction program, which is intended to boost the development of the civil aviation sector and includes investments of more than Ps. 22.0 billion over the 2017-2020 period.

• Border Pass. On October 28, 2016, President Macri announced the commencement of the preselection period for tenders for the construction of the Paso Agua Negra (Agua Negra Pass) tunnel, which will link the province of San Juan with the Coquimbo port in Chile to improve cargo transportation across Argentina and Chile. The construction cost is estimated at U.S.$ 1.5 billion.

• Promotion of productive activity. In October 2016, through the issuance of regulations supplementing the Ley Pyme (SME Act), the following tax benefits for SMEs were introduced:

• the notional minimum income tax for SMEs was eliminated;

• SMEs can deduct taxes paid on financial transactions from income tax payments;

• SMEs may defer monthly VAT payments for 90 days;

• SMEs may deduct 10% of their investments from their income tax payments; and

• SMEs will receive VAT returns from investments, in the form of a tax credit bond, to be used for tax paying purposes.

In December 2016, the European Investment Bank approved a €60 million line of credit to finance micro and small and medium-sized enterprises, prioritizing productive investments, the use of renewable energies and the development of foreign trade.

• Private-Public Partnerships Law. On November 16, 2016, Congress approved the Private-Public Partnerships’ Law, which provides for a special regime for infrastructure projects by private investors in partnership with the public sector. Pursuant to this law, the Government and private investors may enter into different types of arrangements depending on the needs of the project, such as agreements, trusts or the creation of sociedades anónimas (corporations). On February 27, 2017, the Government issued Decree No. 118/2017, which regulates the Private-Public Partnerships’ Law.

• Amendment to the Capital Markets Law. In November 2016, the Government submitted a bill to Congress with comprehensive amendments to the current Capital Markets Law No. 26,831, and other related laws. Furthermore, the bill provides for the amendment of certain tax provisions and regulations relating to derivatives, as well as for the promotion of a financial inclusion program. The main proposed amendments,

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which are generally intended to increase flexibility and legal certainty while mitigating systemic risk and avoiding conflict of interests, include:

• Amendments affecting the power and function of the Comisión Nacional de Valores’s (the “CNV”), including the CNV’s power to appoint observers with veto powers and to remove a company’s board of directors without the prior intervention of a competent court;

• the reestablishment of the jurisdiction of the commercial courts (as opposed to courts with jurisdiction over administrative matters) to hear appeals relating to resolutions and fines imposed by the CNV;

• a modification of the criteria to determine, among other things, the price and launch of mandatory tender offers triggered by a change in control; and

• amendments relating to the sanctions and other powers of the CNV and other amendments relating to the regulation of certain financial products and activities.

• Climate change. The National Cabinet on Climate Change was created, which will establish policies and seek to generate public awareness.

• Infrastructure. On January 10, 2017, the Macri administration announced a multi-sector agreement among the province of Neuquén, several oil companies and labor unions to develop the Vaca Muerta oil fields.

• Increase in Minimum Income. In December 2016, Congress approved an increase in the minimum income threshold (on a net basis) by approximately 23%, from Ps. 25,000 to Ps. 30,670 for married workers with two children and from Ps. 18,880 to Ps. 23,185 for single workers. The minimum income threshold will be subject to automatic adjustment going forward, by reference to increases in the average wages paid to public sector employees. Congress also passed modifications to the income tax brackets to take into account the impact of inflation in recent years.

The fiscal, monetary and currency adjustments undertaken by the Macri administration may subdue growth in the short term, but seek to guide the economy toward a sustained path for growth in the medium-term. Immediately after the foreign exchange controls were lifted on December 16, 2015, the dismantling of the multiple exchange regime resulted in the official peso exchange rate (available only for certain types of transactions) adjusting in value by 40.1%, as the peso-U.S. dollar exchange rate reached Ps. 13.76 to U.S.$1.00 on December 17, 2015. The Central Bank has since allowed the peso to float with limited intervention intended to ensure the orderly operation of the foreign exchange market. On March 7, 2017, the exchange rate was Ps. 15.50 to U.S.$1.00.

GROSS DOMESTIC PRODUCT AND STRUCTURE OF THE ECONOMY

The following table sets forth the evolution of GDP and per capita GDP for the periods specified, at current prices.

Evolution of GDP and Per Capita GDP

(at current prices)

	Nine months ended September 30, 2015		Nine months ended September 30, 2016
GDP (in millions of pesos)(1)		Ps. 5,648,709		Ps. 7,783,369
GDP (in millions of U.S. dollars)(1)		U.S.$    629,586		U.S.$    534,570
Per capita GDP(1)		U.S.$      14,636		U.S.$      12,296
Peso / U.S. dollar exchange rate(2)		8.97		14.56

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(1) Annualized. As with all quarterly GDP figures released by INDEC, nominal GDP data for each quarter is annualized by multiplying such data by four (in this case of the GDP information for nine months ended September 30, 2015 and 2016, for each of the three quarters) and dividing the sum of such annualized information by the number of quarters involved in the calculation. This annualized figure is included for comparison purposes only and is not necessarily indicative of performance for the full fiscal year.

(2) Average rate for the period specified.

Source: INDEC and Ministry of the Treasury.

The following tables set forth information on Argentina’s real GDP, by expenditure, for the periods specified, at constant 2004 prices.

Composition of Real GDP by Expenditure

(in millions of pesos, at constant 2004 prices)

	Nine months ended September 30, 2015			Nine months ended September 30, 2016
Consumption:
Public sector consumption	Ps.	94,596		Ps.	95,953
Private consumption		531,342			524,779
Total consumption		625,938			620,732
Gross investment		141,505			134,647
Exports of goods and services		140,276			143,262
Imports of goods and services		177,301			188,885
Net exports/(imports)		(37,024	)		(45,623	)
Inventory provision		(4,181	)		(1,036	)
Real GDP	Ps.	726,238		Ps.	708,721

Source: INDEC and Ministry of the Treasury.

Composition of Real GDP by Expenditure

(as % of total real GDP, at constant 2004 prices)

	Nine months ended September 30, 2015			Nine months ended September 30, 2016
Consumption:
Public sector consumption		13.0	%		13.5	%
Private consumption		73.2	%		74.0	%
Total consumption		86.2	%		87.6	%
Gross investment		19.5	%		19.0	%
Exports of goods and services		19.3	%		20.2	%
Imports of goods and services		24.4	%		26.7	%
Net exports/(imports)		(5.1	)		(6.4	)
Inventory provision		(0.6	)		(0.1	)
Real GDP		100.0	%		100.0	%

Source: INDEC and Ministry of the Treasury.

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In the nine months ended September 30, 2016, Argentina’s real GDP decreased by 2.4% compared to the same period in 2015. The decrease of real GDP was driven by a 4.8% decrease in gross investment and by a 0.8% decrease in total consumption, resulting from a 1.7% decrease in private sector consumption that was only partially offset by a 1.4% increase in public sector consumption.

During the nine months ended September 30, 2016, the services sector decreased by 0.2% and accounted for 51.1% of real GDP during this period. Within the services sector, financial services experienced the highest rate of decline. As compared to the same period in 2015, the primary production sector decreased by 6.2% and the secondary production sector decreased by 6.0%.

The following table sets forth the composition of Argentina’s real GDP by economic sector for the periods specified.

Real GDP by Sector

(in millions of pesos, at constant 2004 prices)

	Nine months ended September 30, 2015		Nine months ended September 30, 2016
Primary production:
Agriculture, livestock, fisheries and forestry	Ps.	61,989	Ps.	57,798
Mining and extractives (including petroleum and gas)		23,479		22,344
Total primary production		85,468		80,141
Secondary production:
Manufacturing		123,708		116,464
Construction		22,834		20,216
Electricity, gas and water		12,407		12,700
Total secondary production		158,949		149,379
Services:
Transportation, storage and communications		55,664		57,235
Trade, hotels and restaurants		104,807		102,444
Financial, real estate, business and rental services		98,968		97,366
Public administration, education, health, social and personal services		99,213		100,965
Domestic services(1)		4,307		4,276
Total services		362,960		362,286
Plus import duties less adjustment for banking service(2)		118,861		116,914
Total real GDP	Ps.	726,238	Ps.	708,721

(1) Includes services completed by domestic workers including caretakers, domestic servants and private chauffeurs.

(2) The production figures in this table do not include duties assessed on imports used in production, which must be taken into account for purposes of determining real GDP. This line item adds import duties for purposes of determining real GDP.

Source: INDEC and Ministry of the Treasury.

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Real GDP by Sector

(as a % of real GDP, at constant 2004 prices)

	Nine months ended September 30, 2015			Nine months ended September 30, 2016
Primary production:
Agriculture, livestock, fisheries and forestry		8.5	%		8.2	%
Mining and extractives (including petroleum and gas)		3.2	%		3.2	%
Total primary production		11.8	%		11.3	%
Secondary production:
Manufacturing		17.0	%		16.4	%
Construction		3.1	%		2.9	%
Electricity, gas and water		1.7	%		1.8	%
Total secondary production		21.9	%		21.1	%
Services:
Transportation, storage and communication		7.7	%		8.1	%
Trade, hotels and restaurants		14.4	%		14.5	%
Financial, real estate, business and rental services		13.6	%		13.7	%
Public administration, education, health, social and personal services		13.7	%		14.2	%
Domestic services(1)		0.6	%		0,6	%
Total services		50.0	%		51.1	%
Plus import duties less adjustment for banking service(2)		16.4	%		16.5	%
Total real GDP		100.0	%		100.0	%

(1) Includes services completed by domestic workers including caretakers, domestic servants and private chauffeurs.

(2) The production figures in this table do not include duties assessed on imports used in production, which must be taken into account for purposes of determining real GDP. Import duties for purposes of determining real GDP are recorded under this line item.

Source: INDEC and Ministry of the Treasury.

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Real GDP Growth by Sector

(% change from same period in previous year, at constant 2004 prices)

	Nine months ended September 30, 2016
Primary production:
Agriculture, livestock, fisheries and forestry		(6.8	)%
Mining and extractives (including petroleum and gas)		(4.8	)
Total primary production		(6.2	)
Secondary production:
Manufacturing		(5.9	)
Construction		(11.5	)
Electricity, gas and water		2.4	%
Total secondary production		(6.0	)
Services:
Transportation, storage and communication		2.8	%
Trade, hotels and restaurants		(2.3	)
Financial, real estate, business and rental services		(1.6	)
Public administration, education, health, social and personal services		1.8	%
Domestic services(1)		(0.7	)
Total services		0.2	%
Plus import duties less adjustment for banking service(2)		(1.6	)
Total real GDP		(2.4	)%

(1) Includes services completed by domestic workers including caretakers, domestic servants and private chauffeurs.

(2) The production figures in this table do not include duties assessed on imports used in production, which must be taken into account for purposes of determining real GDP. Import duties for purposes of determining real GDP are recorded under this line item.

Source: INDEC and Ministry of the Treasury.

Primary Production

In the nine months ended September 30, 2016, the total primary sector production decreased to Ps. 80.1 billion, or 6.2%, from Ps. 85.5 billion in the same period in 2015. Only fisheries showed growth during this period, increasing by 1.0%, from Ps. 2.2 billion in the nine months ended September 30, 2015 to Ps. 2.3 billion in the same period in 2016.

Secondary Production

In the nine months ended September 30, 2016, the total secondary sector production decreased to Ps. 149.4 billion, or 6.0%, from Ps. 158.9 billion in the same period in 2015. While electricity, gas and water services grew by 2.4% compared to the same period in 2015, manufacturing activities were adversely affected by the contraction in domestic demand and the inability to access export markets, and the construction sector, which accounted for 2.9% of real GDP, decreased by 11.5% compared to the same period in 2015, mainly as a result of the decrease in private investment.

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Services

Composition of Services Sector

(in millions of pesos, at constant 2004 prices)

	Nine months ended September 30, 2015		Nine months ended September 30, 2016
Wholesale and retail trade and repairs	Ps.	93,939	Ps.	91,516
Transportation, storage and communication services		55,664		57,235
Real estate, business and rental services		72,033		71,477
Education, Social and health services		48,525		49,779
Financial services		26,936		25,889
Other community, social and personal services		18,730		18,470
Public administration		31,959		32,717
Hotels and restaurants		10,868		10,928
Other services		4,307		4,276
Total	Ps.	362,960	Ps.	362,286

Source: INDEC and Ministry of the Treasury.

Growth of Services Sector

(% change from previous year, at constant 2004 prices)

	Nine months ended September 30, 2016
Wholesale and retail trade and repairs		(2.6	)%
Transportation, storage and communication services		2.8
Real estate, business and rental services		(0.8	)
Education, social and health services		2.6
Financial services		(3.9	)
Other community, social and personal services		(1.4	)
Public administration		2.4
Hotels and restaurants		0.6
Other services		(0.7	)
Total		0.2	%

(1) Data for the nine months ended September 30, 2016 as compared to the same period in 2015.

In the nine months ended September 30, 2016, the services sector decreased slightly by 0.2% compared to the same period in 2015. This decrease was primarily driven by a 2.6% decrease in wholesale and retail trade and repairs services, as well as a 3.9% decrease in financial services. This decrease was offset by a 2.8% increase in transportation, storage and communication services and a 2.6% increase in education, social and health services. In the first nine months ended September 30, 2016, the services sector represented 51.1% of real GDP.

Poverty and Income Distribution

On September 22, 2016, the INDEC resumed publication of its essential goods and services basket assessment for the Greater Buenos Aires area. On February 21, 2017, this assessment indicated that a standard

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family required Ps. 13,324 to gain access to the essential goods and services basket in January 2017, compared to Ps. 11,320 in April 2016.

According to indicators published by the INDEC on September 28, 2016 , in the second half of 2016, 32.2% of the population and 23.1% of households lived below the poverty and indigence lines, respectively.

Wages and Labor Productivity

In January 2016, the Ministry of Employment and Social Security, through the Wage Council, increased the minimum monthly wage to Ps. 6,060. In May 2016, the minimum monthly wage was further increased to Ps. 8,060, representing an increase of 33%, which became fully effective in January 2017. This increase in wages was implemented in three phases: 12.3% in June 2016 (to Ps. 6,810), 12.4% in September 2016 (to Ps. 7,560) and 8.3% in January 2017 (to Ps. 8,060). In addition, unemployment insurance was increased by 750%, with the minimum amount set as Ps. 1,875 and the maximum amount as Ps. 3,000 for the first three months, which gradually decreases to Ps. 1,200 after one year.

Environment

In March 2016, the Government signed an agreement with the World Bank to finance the Cuenca Matanza—Riachuelo Sustainable Development Program for a total cost of approximately U.S.$1 billion.

BALANCE OF PAYMENTS

Current Account

In the first nine months of 2016, the Republic’s balance of payments registered a U.S.$4.0 billion surplus. This surplus was primarily generated by:

• a U.S.$14.5 billion surplus in the capital and financial account, compared to a U.S.$15.6 billion surplus recorded in the first nine months of 2015;

• a U.S.$10.7 billion deficit in the current account, compared to a U.S.$11.9 billion deficit recorded in the first nine months of 2015; and

• a U.S.$238 million surplus in errors and omissions, compared to a U.S.$1.3 billion deficit recorded in the first nine months of 2015.

In the first nine months of 2016, the current account deficit decreased mainly due to an increase in the trade balance surplus that was partially offset by an increase in the non-financial services deficit, which recorded a deficit of U.S.$5.7 billion in the first nine months of 2016, compared to a deficit of U.S.$3.2 billion in the same period of 2015. The increase in the trade balance surplus was due to an 8.7% decrease in imports, while exports decreased by 1.6% in the same period. The financial services account deficit decreased by 2.1% in the first nine months of 2015, mainly due to a 15.5% decrease in dividend payments abroad, which was partially offset by a 22.5% increase in interest payment outflows.

Trade Regulation

On January 18, 2016, the Government informed the dispute settlement body that it had modified its import requirements to comply with World Trade Organization rulings.

Capital and Financial Account

In the first nine months of 2016, the capital and financial account registered a surplus of U.S.$14.5 billion as compared to a surplus of U.S.$15.6 billion in the same period 2015.

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Central Bank. Capital flows to the Central Bank decreased from a surplus of U.S.$7.2 billion to a surplus of U.S.$3.8 billion. This decrease was mainly the result of the unwinding of the currency swap with the People’s Bank of China in 2015.

Non-financial private sector. Capital flows recorded a surplus of U.S.$5.6 billion in the first nine months of 2015 compared to a deficit of U.S.$3.0 billion in 2016. The net decrease in capital inflows was mainly due to a U.S.$9.5 billion decrease in investments in local assets by foreign investors, from a U.S.$12.5 billion surplus recorded in the first nine months of 2015 to a U.S.$3.0 billion surplus recorded in the first nine months of 2016. Investments in external assets by residents, recorded a U.S.$7.0 billion deficit in the first nine months of 2015 compared to a U.S.$8.9 billion deficit recorded in the first nine months of 2016. Investments by non-residents in public bonds increased from U.S.$ 53 million in the first nine months of 2015 to U.S$ 3.1 billion in the same period in 2016.

Non-financial public sector. Capital flows increased from a surplus of U.S.$892 million in 2015 to a surplus of U.S.$14.8 billion for the same period in 2016. The increase in net capital inflows reflected a U.S.$19.3 billion increase in issuances in the period, as compared to inflows registered in 2015.

Other financial entities. Capital inflows recorded a surplus of U.S.$1.9 billion in the first nine months of 2015 compared to a deficit of U.S.$1.2 billion in 2016. This decrease in surplus was mainly due to an increase in nonresident deposits.

In the first nine months of 2016, net foreign direct investment decreased by U.S.$4.8 billion to U.S.$4.1 billion, as compared to U.S.$8.9 billion in the first nine months of 2015.

International Reserves

As of February 20, 2017, the gross international reserve assets of the Central Bank totaled U.S.$49.1 billion, compared to U.S.$38.8 billion as of December 31, 2016.

MONETARY SYSTEM

Monetary Policy

Inflation

The Central Bank and the Government introduced two new financial instruments intended to safeguard savings and long-term loans from the effects of inflation. In April 2016, the Central Bank by means of Communication “A” 5945 (as amended and restated by Communication “A” 6069) introduced the first instrument, known as Unidades de Valor Adquisitivo (UVAs), with an initial value based on the average construction cost of a square meter in the cities of Buenos Aires, Córdoba, Rosario, Salta and the coastal region (Santa Fe de la Vera Cruz to Paraná) as of March 31, 2016. The value of UVAs is adjusted on a daily basis, based on the CER. In September 2016, the Government by means of Law No. 27,271, introduced the second instrument, known as Unidades de Vivienda (UVIs) with an initial value based on the average construction cost of a square meter in Argentina. The value of UVIs is adjusted on a monthly basis, based on the “Índice de la Construcción para el Gran Buenos Aires” published by the INDEC, based on the CER.

On June 15, July 13, August 12, September 13, October 13, November 10 and December 15, 2016, and January 11, February 9 and March 9, 2017, the INDEC published inflation rates of 4.2%, 3.1%, 2.0%, 0.2%, 1.1%, 2.4%, 1.6%, 1.2%, 1.3% and 2.5% for May, June, July, August, September, October, November and December 2016, and January 2017 and February, respectively, using its new methodology for calculating the CPI.

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Securities Markets

Regulation of the Securities Markets

On December 29, 2016, the CNV authorized Bolsas y Mercados Argentinos (“ByMA”) as a market for the listing of securities through a public offering approval. The Republic of Argentina expects that once ByMA begins its activities the listing of notes on the MERVAL will be automatically transferred to ByMA.

Mutual Funds and the FGS

As of November 2016, the FGS was valued at Ps. 865.2 billion and public securities held by the FGS amounted to Ps. 496.5 billion, representing 57.4% of its total assets.

Total Assets of the FGS

	2015			Eleven month period ended November 30, 2016
Assets (in millions of pesos)		Ps.664.0			Ps.865.2
Percentage increase from previous period		40.6	%		34.6	%

Source: Central Bank.

PUBLIC SECTOR FINANCES

National Public Accounts

New Presentation

In March 2016, the Macri administration adopted a new methodology intended to increase transparency in the reporting of fiscal results. The main modifications introduced in the new presentation of fiscal results consist of excluding transfers from the Central Bank and FGS to the Government from total current fiscal revenues and excluding interest payments on public debt made by the Government from total current fiscal expenditures. In addition, it includes an estimate of the increase in the amount of deferred current obligations. Since the expenditures of the non-financial public sector are recorded at the time of payment in accordance with the cash method of accounting, expenditures relating to the consumption of goods and services incurred in a given period are recorded in a subsequent period if payment is deferred as a result of the Government’s discretionary power to do so. Recording the non-financial public sector’s accrued expenditures is a way to monitor the discrepancy between expenditures associated with actual consumption during a period which will be actually paid for during subsequent periods.

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The 2017 Budget

The table below presents a comparison of the 2017 budget against the projected 2016 budget.

	Budget Comparison (in millions of pesos)
	Projected 2016(1)			2017			Difference
							Ps.			%
Current Revenues		1,686,612.9			2,068,482.8			381,869.9			22.6	%
Tax Revenues		875,429.5			1,104,127.5			228,698.0			26.1	%
Social Security Contributions		563,499.6			698,814.3			135,314.7			24.0	%
Non-Tax Revenues		39,044.5			50,176.9			11,132.4			28.5	%
Sales of Goods and Services of the Public Administration		7,473.2			11,100.8			3,627.6			48.5	%
Property Taxes		189,251			201,501.1			12,250.1			6.5	%
Current Transfers		10,838.5			1,443.3			(9,395.2	)		(86.7	)%
Other Revenues		1,076.0			1,318.9			243.0			22.6	%
Operating Surplus of Public Entities
Current Expenditures		1,903,730.2			2,314,013.5			410,283.3			21.6	%
Consumption Expenditures		342,601.5			426,913.7			84,312.2			24.6	%
Personnel		256,276.1			319,341.3			63,065.2			24.6	%
Goods and services		86,325.4			107,572.4			21,247.0			24.6	%
Property Taxes		193,262.6			255,945.8			62,683.2			32.4	%
Social Security Expenditures		712,389.3			963,181.1			250,791.8			35.2	%
Direct Taxes		2,505.1			3,542.2			1,037.1			41.4	%
Other Losses		2,174.6			3,574.8			1,400.2			64.4	%
Current Transfers		609,272.6			632,568.7			23,296.1			3.8	%
Operating Deficit of Public Entities		41,524.5			28,287.2			(13,237.3	)		(31.9	)%
Primary Result		(217,117.3	)		(245,530.7	)		(28,413.4	)		13.1	%
Capital Resources		753.7			388.04			(365.3	)		(48.5	)%
Capital Expenditures		181,108.4			236,917.8			55,809.4			30.8	%
Real Direct Investment		82,627.6			108,460.9			25,833.3			31.3	%
Capital Transfers		80,467.3			112,692.3			32,225.0			40.0	%
Financial Investment		18,013.5			15,764.6			(2,248.9	)		(12.5	)%
Total Resources		1,687,366.6			2,068,871.2			381,504.6			22.6	%
Total Expenditures		2,084,838.6			2,550,931.3			466,092.7			22.4	%
Total Primary Expenditures		1,891,597.8			2,295,001.0			403,403.2			21.3	%
Primary Result		(204,231.2	)		(226,129.8	)		(21,898.6	)		10.7	%
Primary Result without BCRA and FGS Gains (losses)		(373,248.0	)		(405,033.2	)		(31,785.2	)		8.5	%
Financial Result		(397,472.0	)		(482,060.1	)		(84,588.1	)		21.3	%

(1) Reflects the projected 2016 budget information as modified by the Macri administration in 2016. Based on preliminary estimates, the Government believes that the fiscal deficit for 2016 (including receipts through December 31, 2016, of approximately Ps.106.8 billion as a result of the Tax Amnesty Law) will be consistent with the projected 4.8% of GDP.

On September 15, 2016, the 2017 budget bill was submitted to Congress. The 2017 budget projects a fiscal deficit representing 4.2% of GDP in 2017. This projected fiscal deficit represents an increase from the previously projected 3.3% of GDP, primarily as a result of two factors: the August 2016 decision of the Supreme Court of Argentina (which held that gas tariffs that had been announced for residential users must retroactively return to

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the levels in effect before tariff increases were implemented) and the Ley de Reparación Histórica a los Jubilados (the Historical Reparations Law for Retirees and Pensioners), which will increase pension expenditures. The budget bill does not include any estimate of revenues arising from the Tax Amnesty Law. The proceeds of its January 2017 offering, as well as other financings in the international capital markets contemplated by the Republic, would be applied to cover the Republic’s financing needs in 2017. The 2017 budget was approved on December 21, 2016. For more information, see “—Macri Administration: 2015-Present—Tariff Increases” and “—Retiree Programs”

One of the cornerstones of the 2017 budget is the expansion of social programs designed to meet the needs of the most vulnerable groups, including the following:

• Childhood Programs. The proposed 2017 budget allocates funds for (i) the Plan Nacional de Primera Infancia (National Plan for Early Childhood), (ii) the construction of 3,000 preschools to advance compulsory schooling for children aged three and older, and (iii) the expansion of the Child Allowance Program to reach 4.1 million beneficiaries, including 514,000 children of monotributistas (self-employed workers), and 200,000 children of temporary workers.

• Healthcare and Retiree Programs. The budget provides for the Cobertura Universal de Salud (Universal Health Insurance Coverage Plan) for 15 million residents who lack health insurance coverage and the Historical Reparation Plan for Retirees and Pensioners, which is expected to reach 2.4 million retirees.

• National Housing Plan. With the aim of addressing the housing needs of low and middle-income families, the budget also provides for the implementation of the Plan Nacional de Vivienda (National Housing Plan), which includes the construction of 120,000 homes and granting 175,000 subsidized housing loans over a three-year period.

Overall, social security expenditures are expected to grow by 35% in 2017.

The 2017 budget further provides for an increase in the minimum monthly wage to Ps. 8,060 in January 2017. This increase in wages was implemented in three phases: 12.3% in June 2016 (to Ps. 6,810), 12.4% in September 2016 (to Ps. 7,560) and 8.3% in January 2017 (to Ps. 8,060).

Infrastructure. The 2017 budget additionally allocates funds for investments in infrastructure projects, including:

• Plan Belgrano, which involves a Ps. 95 billion investment to promote infrastructure development in the northern provinces of Argentina;

• rebuilding the national transportation system to increase the competitiveness of regional economies, including through a U.S.$2.0 billion investment for the construction of 2,800 kilometers of highways over a four-year period; and

• the ongoing Plan Nacional de Agua 2016-2019 (National Water Plan 2016-2019), which is expected to generate 500,000 jobs.

Fiscal Result of 2016 as Compared to 2015.

Primary fiscal balance. The primary deficit recorded for 2016 was Ps.359.4 billion, compared to a deficit of Ps.235.1 billion for 2015. Total primary revenues increased by 35.3% in 2016, and primary expenditures (excluding interest payments) increased by 38.2%.

Fiscal revenues. In 2016, fiscal revenues increased by 35.3% to Ps. 1,613.5 billion from Ps. 1,192.9 billion in 2015. This increase was mainly driven by an increase in revenues generated by social security taxes, VAT, income tax, taxes on fuel and financial transactions. During 2015, the Government auctioned the 4G spectrum, which resulted in a 5.3% increase in “other non-tax revenues.”

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Primary expenditures. In 2016, primary expenditures (excluding interest payments) of the national public sector increased by 38.2% from Ps. 1,428 billion in 2015 to Ps.1,972.8 billion in 2016. This increase was mainly due to the following factors:

• social security outlays, which accounted for approximately 36.5% of the overall increase in expenditure, increased by 37.2%, from Ps. 535.7 billion in 2015 to Ps. 734.7 billion in 2016, mainly as a result of an increase in the number of retirees and successive increases in pension payments;

• other transfers (including external sector transfers, private sector subsidies and transfers to autonomous public entities such as universities), which accounted for approximately 45.0% of the overall increase, increased by 61.0%, from Ps. 401.82 billion in 2015 to Ps. 646.7 billion in 2016. This increase was mainly due to the increase in subsidies to the electricity sector. The increase in other transfers was also driven by the increase in outlays to social security payments, particularly through the Universal Child Allowance and Universal Pregnancy Allowances, and transfers to local transportation providers and the “Acciones de Sustentabilidad de Suministro de Energía Eléctica” Program. Since March 2016, family allowances to self-employed and temporary workers have been extended. This measure is available to 514,000 children and their families.

• national administration wages, which accounted for approximately 12.4% of the total increase, increased by 34.0% from Ps. 199.1 billion in 2015 to Ps. 266.8 billion in 2016.Capital expenditures, increased from Ps. 160.9 billion in 2015 to Ps. 182.0 billion in 2016.

Transfers to the Government from the Central Bank and FGS increased by 37.7% in 2016, while interest payments increased by 53.3% in the same period.

Overall fiscal balance. The overall fiscal balance recorded a deficit of Ps. 365.1 billion in 2016, compared to a deficit of Ps. 225.6 billion in 2015.

Tax Regime

Taxes on Income

On March 22, 2016, the AFIP increased the amount of gross income (from Ps. 96,000 to Ps. 200,000) above which employees must submit an affidavit of personal assets, and increased the amount of gross income (from Ps. 144,000 to Ps. 300,000) above which employees must submit an affidavit of personal assets and income tax reports.

Congress also passed modifications to the income tax brackets to take into account the impact of inflation in recent years.

Tax Amnesty Law

The legislative debate on the Tax Amnesty Law related mainly to the expected impact of the proposed law on the repatriation of capital held abroad by Argentine residents, its effectiveness to reduce money laundering, undeclared consumption, hidden liabilities and the possibility to enhance the development of the capital markets sector and foster investment in Argentina.

In July 2016, a voluntary and extraordinary tax disclosure and regularization regime for the holding of foreign and local currency and assets located in Argentina and abroad was enacted by the Federal Congress (Law 27,260). Tax disclosure as well as regularization may be conducted until March 31, 2017, while the disclosure of cash shall be made effective by October 31, 2016. A special tax is applicable on the value of the disclosed currency and assets, unless adherent taxpayers subscribe certain investment securities. Among other aspects, the regime also provides benefits for compliant taxpayers, certain changes in the personal assets tax, the abrogation of the 10% income tax withholding on dividends distributed by Argentine companies and the abrogation of the notional minimum income tax commencing on January 1, 2019. To date, 21 out of 23 Argentine provinces have

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adhered to the referred regime. Corrientes, Chubut and Formosa, are the only Provinces that have not adhered to the Tax Amnesty Law.

In August 2016, the Government announced the issuance of two new bonds, BONAR 0% 2019 and BONAR 1% 2023 for up to U.S.$8.0 billion, which can be subscribed for by taxpayers participating in the new Tax Amnesty Law that allows taxpayers to declare financial assets that have not been reported under applicable tax rules. On October 31, 2016, the Ministry of the Treasury and Public Finances and the AFIP announced that during the first stage of the Tax Amnesty Law implementation, U.S.$4.6 billion cash holdings had been declared. In addition, the cut-off date for depositing declared cash amounts was extended through November 21, 2016.

On October 31, 2016, the Ministry of the Treasury and Public Finances and the AFIP announced that during the first stage of the Tax Amnesty Law implementation, U.S.$4.6 billion cash holdings had been declared The second stage, which expired on December 31, 2016, is aimed at declaring amounts held abroad. The third and last stage is aimed at declaring fixed and movable assets held abroad and in Argentina, and expires on March 31, 2017.

Fiscal Relations with the Provinces

Revenue Transfers

In February 2016, the Macri administration issued an emergency decree creating the Programa Acuerdo para el Nuevo Federalismo (“Agreement for a New Federalism”) and forming a designated council with the objective of reaching an agreement among the Government and provinces, other than Córdoba, San Luis and Santa Fe, for the gradual repayment of funds withheld under Article 76 of the 2006 National Budget Law. In May 2016, each province (other than Córdoba, San Luis and Santa Fe) and the City of Buenos Aires agreed to be bound by the terms of the Agreement for a New Federalism, through which they will gradually recover their share of the 15% withheld by the Government, subject to certain conditions. A special financing facility through ANSES will provide the equivalent of 6% of such 15% owed to those provinces and the City of Buenos Aires during 2016, and 3% each year during a 5-year period thereafter. The Government reached separate agreements with Córdoba, San Luis and Santa Fe, reflecting the restitution in favor of those provinces ordered by the Supreme Court.

On October 25, 2016, the Minister of the Treasury and Public Finance along with the provincial ministers of finance announced the inclusion of certain amendments to the Fiscal Responsibility Law (Ley de Responsabilidad Fiscal) in the 2017 Budgeting. The amendments aim to reduce the overall public sector deficit by 10% in 2017, enhance transparency in provincial public accounts and restrain public spending by capping public spending increases in 2017 at the growth rate of nominal GDP.

The Consejo Federal de Responsabilidad Fiscal (Federal Council of Fiscal Responsibility) agreed a joint work schedule to create a comprehensive and definitive reform to be implemented in 2018.

On October 26, 2016, agreements were signed to normalize the financial relationship between the Province of Córdoba, ANSES and the Government. Pursuant to these agreements the Government acknowledges the debt of financial assistance owed to the provincial pension fund of the Province of Córdoba in line with the parameters established in the Ley de la Reparación Histórica (Law of Historical Reparation). Additionally, the Government committed to assist the provincial pension fund during 2016 with Ps. 3.4 billion. Part of the Government’s debt held by the Province of Córdoba was set-off against claims of the Government against the Province of Córdoba. The remainder, which amounts to Ps. 2.0 billion, will be paid by ANSES, of which Ps. 1.5 billion will be transferred immediately to the province and the remaining Ps. 500 million will be transferred once the province’s social security system is conformed to the national social security system.

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Composition of Public Expenditure

Public Infrastructure and Services

On December 21, 2016, the Supreme Court of Argentina suspended the construction at the “Presidente Néstor Kirchner” and “Governor Jorge Cepernic” dams in the province of Santa Cruz. The Supreme Court found that the legally mandated environmental impact assessment and public hearing regarding the projects had not been conducted.

PUBLIC SECTOR DEBT

The Republic’s total gross public debt increased by 1.7% from U.S.$240.7 billion as of December 31, 2015 (53.5% of nominal GDP) to U.S.$ 244.8 billion (52.7% of nominal GDP) as of June 30, 2016.

As of June 30, 2016, total gross public debt (including non-performing debt and Untendered Debt) by type of creditor was as follows:

• 55.0% of total gross public debt, or U.S.$134.7 billion, primarily consisted of public bonds, National Guaranteed Loans, temporary advances from the Central Bank and promissory notes held by various public sector entities including the Central Bank, FGS, ANSES and Banco de la Nación Argentina, which we refer to as “Public Debt held by National Public Sector Agencies.”

• 33.6% of total gross public debt, or U.S.$82.2 billion, was held by creditors other than public sector entities or other official sector creditors, which we collectively refer to as “Public Debt held by the Private Sector.”

• 11.4% of total gross public debt, or U.S.$27.9 billion, primarily consisted of obligations owed to multilateral credit organizations such as the World Bank, the IADB and CAF, as well as debt with the Paris Club, which we refer to as “Public Debt held by Other Creditors.”

As of June 30, 2016, performing debt totaled U.S.$236.0 billion, non-performing debt (excluding Untendered Debt) totaled U.S.$44.5 million and the outstanding principal amount of Untendered Debt totaled U.S.$3.8 billion. Since June 30, 2016, Argentina has settled claims with holders of an outstanding principal amount of Untendered Debt totaling U.S.$2.2 billion.

Foreign currency-denominated debt represented 72.2% (U.S.$176.8 billion) of total gross public debt as of June 30, 2016 compared to 69.3% of total gross public debt as of December 31, 2015. The Republic’s total gross foreign currency public debt was denominated as follows:

• 86.7% in U.S. dollars;

• 12.0% in euro;

• 1.1% in Japanese yen; and

• 0.2% in other foreign currencies.

Total peso-denominated debt, increased 5.5% to Ps. 1,013.6 billion (U.S.$67.9 billion, or 27.8% of gross public total debt) as of June 30, 2016 from Ps.961.1 billion (U.S.$73.9 billion, or 30.7% of gross public total debt) as of December 31, 2015.

As of September 30, 2016, the Republic’s total gross public debt increased by 4.4% to U.S.$251.1 billion (51.4% of nominal GDP ) from U.S.$240.7 billion as of December 31, 2015 (53.5% of nominal GDP).

Foreign Currency-Denominated Debt in 2016

Between January 1 and December 31, 2016, the Republic issued foreign currency-denominated debt in an aggregate principal amount of U.S.$21.1 billion, of which U.S.$16.5 billion corresponded to U.S. Dollar

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denominated bonds issued in connection with the April 2016 Transaction, U.S.$2.75 billion corresponded to the U.S. Dollar-denominated bonds issued on July 6, 2016, U.S.$1.6 billion corresponded to the issuance of BONAR 20 bonds, U.S.$0.2 billion corresponded to the issuance of BONAR 24 bonds, and €2.5 billion correspond to two euro denominated bonds issued on October 12, 2016.

Foreign Currency-Denominated Debt Service

Projected Performing Foreign Currency-Denominated Public Debt Service by Instrument for Primary Issues between January 1 and December 31, 2016⁽¹⁾ (in millions of U.S. dollars)

	2017				2018				2019				2020
	Capital		Interest		Capital		Interest		Capital		Interest		Capital		Interest
BIRAD U.S. Dollar 6.25% due 2019		—	U.S. $	171.9		—	U.S. $	171.9	U.S. $	2,750.0	U.S. $	85.9
BIRAD U.S. Dollar 6.875% due 2021		—		309.4		—		309.4		—		309.4		—	U.S. $	309.4
BIRAD U.S. Dollar 7.5% due 2026		—		487.5		—		487.5		—		487.5		—		487.5
BIRAD U.S. Dollar 7.625% due 2046		—		209.7		—		209.7		—		209.7		—		209.7
BIRAD U.S. Dollar 6.625% due 2028		—		66.3				66.3				66.3		—		66.3
BIRAD U.S. Dollar 7.125% due 2036		—		124.7				124.7				124.7		—		124.7
BONAR 24		—		19.1		—		19.1		36.3		19.1		36.3		19.1
BONAR 20		—		131.5		—		131.5		—		131.5		1,643.1		131.5
BIRAE EUR 3.875% due 2022(2)		—		13.4		—		50.6		—		50.6		—		50.6
BIRAE EUR 5.0% due 2027(2)		—		17.2		—		65.3		—		65.3		—		65.3

	2021				2022				2023				2024
	Capital		Interest		Capital		Interest		Capital		Interest		Capital		Interest
BIRAD U.S. Dollar 6.25% due 2019		—		—		—		—		—		—		—		—
BIRAD U.S. Dollar 6.875% due 2021		4,500		154,7		—		—		—		—		—		—
BIRAD U.S. Dollar 7.5% due 2026		—		487.5		—		487.5		—		487.5		—		487.5
BIRAD U.S. Dollar 7.625% due 2046		—		209.7		—		209.7		—		209.7		—		209.7
BIRAD U.S. Dollar 6.625% due 2028		—		66.3		—		66.3				66.3				66.3
BIRAD U.S. Dollar 7.125% due 2036		—		124.7		—		124.7				124.7				124.7
BONAR 24		36.3		19.1		—		19.1		—		19.1		36.3		19.1
BONAR 20		—		—		—		—		—		—		—		—
BIRAE EUR 3.875% due 2022(2)		—		50.6		1,305.8		50.6		—		—		—		—
BIRAE EUR 5.0% due 2027(2)		—		63.5		—		65.3		—		65.3		—		65.3

(1) Preliminary figures.

(2) Calculated based on the exchange rate as of December 31, 2016.

Source: INDEC and Ministry of the Treasury.

U.S. Dollar-Denominated Treasury Bills Program

On April 27, 2016, the former Ministry of the Treasury announced its decision to access the domestic US-dollar market in 2016 by issuing Letras del Tesoro denominadas en Dólares Estadounidenses (“LETES”) (U.S. Dollar-Denominated Treasury Bills) in connection with its 2016 financial program. As of December 31, 2016, LETES having an aggregate principal amount of U.S.$7.6 billion were outstanding.

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Foreign Currency-Denominated Debt in 2017

Between January 1 and February 21, 2017, the Republic issued foreign currency-denominated debt in an aggregate principal amount of U.S.$7.1 billion, of which U.S.$7.0 billion corresponded to U.S. Dollar-denominated bonds issued on January 26, 2017 and U.S.$0.1 billion corresponded to the issuance of BONAR 20 bonds.

Foreign Currency-Denominated Debt Service

Projected Performing Foreign Currency-Denominated Public Debt Service by Instrument for Primary Issues between January 1 and February 21, 2017⁽¹⁾ (in millions of U.S. dollars)

	2017				2018				2019				2020
	Capital		Interest		Capital		Interest		Capital		Interest		Capital		Interest
BIRAD U.S. Dollar 5.625% due 2022		—	U.S. $	91.4		—	U.S. $	182.8			U.S. $	182.8			U.S.$	182.8
BIRAD U.S. Dollar 6.875% due 2027		—		128.9		—		257.8		—		257.8		—		257.8
BONAR 20		—		7.3		—		7.3		—		7.3		91.7		7.3

	2021				2022				2023				2024
	Capital		Interest		Capital		Interest		Capital		Interest		Capital		Interest
BIRAD U.S. Dollar 5.625% due 2022		—	U.S.$	182.8	U.S.$	3,250.00	U.S.$	91.4		—		—		—		—
BIRAD U.S. Dollar 6.875% due 2027				257.8		—		257.8		—		257.8		—		257.8
BONAR 20		—		—		—		—		—		—		—		—

(1) Preliminary figures.

Source: INDEC and Ministry of the Treasury.

U.S. Dollar-Denominated Treasury Bills Program

Between January 1 and February 21, 2017, the Republic issued LETES in an aggregate principal amount of U.S.$4.9 billion. As of February 21, 2017, LETES having an aggregate principal amount of U.S.$9.7 billion were outstanding.

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THE REPUBLIC OF ARGENTINA

Map of Argentina

Territory and Population

The Republic of Argentina consists of 23 provinces and the City of Buenos Aires. Located in the southeastern region of South America, Argentina is the second largest country in Latin America and the eighth globally in terms of territory, covering approximately 3.8 million square kilometers (1.5 million square miles), including territorial claims in the Antarctic region (covering approximately 970,000 square kilometers) and to certain south Atlantic islands (covering approximately 5,000 square kilometers), excluding the recently recognized extension by Argentina’s sovereign rights in the South Atlantic Ocean. See “—Foreign Affairs and International Organizations—Sovereign Territorial Disputes.”

The most densely inhabited areas and the main agricultural regions of the country are located on the wide temperate belt that stretches across central Argentina. The country’s population as of 2010, the year of the most recent census, was an estimated 40.1 million. As of 2014, the World Bank estimates a total population of 43.0 million. As of 2010, approximately 91.0% of the population of Argentina lived in urban areas and approximately 46.2% of the population (18.5 million people) lived in the City of Buenos Aires and the heavily populated urban area surrounding the City of Buenos Aires, known as the Greater Buenos Aires Area. During the period from 2001 to 2014, Argentina’s population grew at an estimated average annual rate of 1.1%, and as of 2010, approximately 98.1% of the population over the age of 10 and older was literate. The table below sets forth comparative gross national income (“GNI”) figures and selected other comparative statistics using 2014 data (the most recent year for which such comparative information is available).

Population

	Argentina			Brazil			Chile			Colombia			Mexico			Peru			United States
Per capita GNI(1)	U.S.$	13,480		U.S.$	11,530		U.S.$	14,910		U.S.$	7,970		U.S.$	9,870		U.S.$	6,360		U.S.$	55,200
Life expectancy (in years)(2)		76			74			81			74			77			74			79
Infant mortality (% of live births)(2)		1.2	%		1.4	%		0.7	%		1.5	%		1.3	%		1.4	%		0.6	%
Adult literacy rate (% of population age 15 or older)(3)		98	%		91	%		97	%		94	%		94	%		94	%		n.a.

(1) Calculated using the World Bank Atlas method.

(2) Data as of 2013

(3) Data as of 2013, except for Peru (2012) and Chile and Colombia (2011).

n.a. = not available.

Source: 2014 World Bank World Development Indicators, unless otherwise specified.

Government

The Argentine Constitution, first adopted in 1853, provides for a tripartite system of government divided into an executive branch headed by the President, a legislative branch consisting of a bicameral Congress, and a judicial branch headed by the Supreme Court of Justice. The Constitution was last amended in 1994. Each province and the City of Buenos Aires has its own constitution and the people of each province elect a governor and legislators who are independent from the Government. The Government may directly intervene in the administration of the provincial governments in certain emergency situations, including, among others, to secure the republican form of government and in the case of foreign invasions.

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Executive Branch

The president and vice president are directly elected for a four-year term, may serve for a maximum of two consecutive terms and may be re-elected after one term out of office. The president oversees the administration of the country and has the power to veto laws in whole or in part. Congress may override a presidential veto by a two-thirds majority vote in each chamber. The Jefatura de Gabinete de Ministros (Office of the Chief of the Cabinet of Ministers) is responsible for the administration of the country and prepares the Government’s annual budget, which is subject to congressional approval. The president chooses the chief of the Cabinet of Ministers, who may be removed by the vote of an absolute majority of both houses of Congress. All references in this prospectus to the “Executive Power” are to the executive branch as described herein.

Congress

Congress is composed of the Senate and the Chamber of Deputies.

The Senate. There are a total of 72 senate seats, with three for each province and three for the City of Buenos Aires. Of the three senators from each district, two represent the party receiving the most votes in that district, and the third represents the party receiving the second-most votes. Senators are elected by popular vote to serve for six-year terms. Elections are held for one-third of the senate seats every two years. The last Senate elections were held in October 2015.

The Chamber of Deputies. The Chamber of Deputies consists of 257 seats, which are allocated in proportion to each district’s population. Deputies are elected by popular vote to serve four-year terms. Elections for half of the seats are held every two years. The last elections for seats in the Chamber of Deputies were held in October 2015.

Judicial System

The judicial system is composed of federal and provincial trial courts, courts of appeal and the Supreme Court of Justice (“Supreme Court”) which has up to five justices.

The Consejo de la Magistratura (Judicial Council) consists of an independent panel of lawyers, representatives of the judiciary, legislators, a representative of the executive branch and an academic. This body oversees the administration of the judicial branch, the initiation of impeachment proceedings against judges other than Supreme Court justices and the selection of judges. The Jurado de Enjuiciamiento (Jury of Prosecution) decides proceedings initiated by the Judicial Council to remove judges.

The president appoints all Supreme Court justices subject to Senate approval. All federal court judges are also appointed by the president subject to Senate approval, but they must be selected from a list of individuals submitted by the Judicial Council. Supreme Court justices and all federal court judges are subject to a mandatory retirement age of 75. All judicial appointments must be approved by two-thirds of the Senate. Pursuant to a presidential decree, candidates’ identities and certain additional information are published, and the executive branch provides for a period of public comment on each nomination before it is submitted to the Senate.

Following the retirement of two justices, the Supreme Court had three sitting justices as of December 2015.

Recent Political History

Argentina has been under uninterrupted civilian rule since 1983, when the last military government came to an end due to poor economic management and the loss of a brief war with the United Kingdom over the Islas Malvinas. In 1983, Raúl Alfonsín was elected president. In 1989, Raúl Alfonsín was succeeded as president by Carlos Menem, who was re-elected in 1995 to a four-year term following the 1994 constitutional amendments that reduced the presidential term to four years from six.

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After a decade of relative stability, Argentina faced an unprecedented social, economic and political crisis beginning in 2001 and 2002. See “The Argentine Economy—Economic History and Background.” During this crisis, Argentina’s economy contracted significantly and poverty and unemployment reached record levels. The administration of President Fernando de la Rúa, who took office in October 1999, was unable to restore economic growth and during the second half of 2001, the deepening economic recession fueled rising social unrest.

Ongoing widespread riots and protests forced President de la Rúa and his entire cabinet to resign on December 19 and 20, 2001. Between December 2001 and January 2002, Congress appointed three successive presidents pursuant to the Constitution, including Eduardo Duhalde, who called for elections to be held on April 27, 2003, prior to the scheduled expiration of his term. Néstor Kirchner, former governor of the province of Santa Cruz, was elected and sworn in as president on May 25, 2003. President Kirchner’s term expired on December 10, 2007. His term in office was marked by economic growth, a reduction of poverty and unemployment rates and large-scale debt renegotiations with a majority of the holders of defaulted Argentine bonds.

On October 28, 2007, Cristina E. Fernández de Kirchner, from the Frente para la Victoria (Front for Victory) party and President Kirchner’s wife, was elected president. On October 23, 2011, President Fernández de Kirchner was re-elected for a second four-year term, which ended on December 10, 2015.

On November 22, 2015, Mauricio Macri, the candidate from the Cambiemos alliance, was elected president with 51.3% of the votes, after the first presidential run-off election in Argentine history. In addition, congressional elections were held in October 2015 for one-third of the members of the Senate and half of the members of the Chamber of Deputies, whose terms expired in December 2015. As of the date of this prospectus, the Cambiemos alliance has the largest bloc in the Chamber of Deputies, while the Front for Victory party retains a majority of the Senate (taking into account alliances among parties). The next congressional elections are scheduled for October 2017.

Political Parties

The following are Argentina’s principal national political parties:

• Cambiemos, founded in 2015, is a coalition of several parties, including primarily:

• Unión Propuesta Republicana (Republican Proposal Union, or “Unión PRO”);

• Unión Cívica Radical (Radical Civic Union, or “UCR”); and

• Coalición Cívica (Civic Coalition, or “ARI”).

• Partido Justicialista (PJ), or Peronist Party, evolved from former President Juan D. Perón’s efforts in the 1940s, and includes the following factions:

• Front for Victory; and

• Frente Peronista (Peronist Front).

• Frente Renovador (Renewal Front, or “FR”), founded in 2013 as a split-off from the PJ. In connection with the 2015 presidential elections, the FR and the former governor of the Province of Córdoba, Juan Manuel de la Sota, formed the Unidos por una Nueva Alternativa (“UNA”) coalition.

In addition, certain provincial political parties have important representation in Congress, including locally-based parties from Santiago del Estero, Neuquén, San Luis and Catamarca.

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The following table shows the party composition of the Chamber of Deputies and Senate following the elections in the years specified.

	Chamber of Deputies(1)							Senate(2)
	2011		2013(6)			2015		2011		2013(6)			2015
Party:
Partido Justicialista		137		127			98		32		38			40
Front for Victory(3)		116		117			81		32		31			40
Peronist Front/ Federal PJ(4)		21		10			17		—		7			—
Radical Civic Union		40		41	(6)		41		14		13			8
Unión PRO		11		18			41				3			6
UNA							28
ARI/Civic Coalition		6		3	(7)		5		1		1	(7)
Frente Renovador				16			—		—		—
FAP(5)		22		15			—		4		5
Others(7)		41		37			44		21		12	(7)		18
Total		257		257			257		72		72			72

(1) Composition of the Chamber of Deputies as of December 10 of each year specified, when the deputies elected during such year took office.

(2) Composition of the Senate as of December 31 of each year specified.

(3) The members of this faction are included in the Partido Justicialista total. In addition to elected deputies and senators, the figures for Front for Victory include deputies and senators from other factions of the Peronist Party who became members of the Front for Victory while in office.

(4) These members of this faction are included in the Partido Justicialista total. Frente Peronista / PJ Federal is the “dissident” Peronist Party, which is the wing of the PJ that is not politically aligned with the Front for Victory and was founded in 2005. Its principal members include Eduardo Duhalde, Felipe Solá and Alberto Rodriguez Saá.

(5) FAP is a center-left coalition composed of various parties, founded in 2011. In the October 2015 elections, the parties Generación para el Encuentro Nacional (“GEN”), Libres del Sur (Free Movement from the South) and Poder para el Espacio Social (Power for the Social Space) formed an electoral alliance “SURGEN”.

(6) In the October 2015 elections, the ARI/Civic Coalition, the Radical Civic Union and Unión Propuesta Republicana (“PRO”) formed an electoral alliance “Cambiemos”.

(7) Includes other registered parties, primarily represented by one legislator each, and certain local political parties of the provinces.

Source: Senate and Chamber of Deputies of Argentina.

In accordance with the political reform bill passed by Congress on December 2, 2009, elections in Argentina are subject to the following regulations:

• Private contributions for electoral campaigns must be from physical persons, not companies. In addition, the Government distributes 50% of state funds for media advertisements equally among all candidate lists, and the remaining 50% is distributed according to the percentage obtained by each political party in the previous election.

• Primary elections to elect presidential and congressional candidates must be open, mandatory and simultaneous. All citizens are allowed to vote in the primary of their choosing, regardless of party affiliation.

• In order to compete in national elections, candidates must obtain at least 1.5% of the vote in the presidential primary contest (including coalitions) and have the support of a certain number of affiliates as specified in the bill.

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Foreign Affairs and International Organizations

Argentina maintains diplomatic relations with a variety of countries and is a member of several international organizations. Argentina is a charter member of the United Nations, a founding member of the Organization of American States (“OAS”), and a member of the following international organizations, among others:

• the International Monetary Fund;

• the World Bank Group;

• the International Finance Corporation;

• the IADB;

• the Corporación Andina de Fomento (the Andean Promotion Corporation, or “CAF”);

• the Fondo Financiero para el Desarrollo de la Cuenca del Plata (Financial Fund for the Development of the River Plate Basin, or “FONPLATA”);

• the Central American Bank for Economic Integration (“CABEI”);

• the International Fund for Agricultural Development (“IFDA”);

• the World Trade Organization (“WTO”);

• the International Labor Organization;

• the Financial Action Task Force and the Financial Action Task Force on Money Laundering in South America (“GAFISUD”);

• the International Association of Insurance Supervisors;

• the International Organization of Securities Commissions;

• the World Customs Organization; and

• the Asociación Latinoamericana de Integración (Latin American Integration Association, or “ALADI”).

G-20

Argentina has been a member of the G-20, an informal forum that promotes discussion between developed and emerging-market countries on key issues related to the global economy, since it was established in 1999. The country members designated the G-20 to be the premier forum for their international economic cooperation.

In October 1997, the United States designated Argentina as a non-North Atlantic Treaty Organization, or “non-NATO,” ally.

Argentina has entered into bilateral investment treaties with various countries, including the United States, Canada, Germany, France, Italy, Spain, Switzerland, Sweden and the United Kingdom. Arbitration proceedings have been brought against Argentina before the ICSID, in accordance with the UNCITRAL, under several bilateral investment treaties, primarily as a result of measures adopted in response to the economic and political crisis of 2001. As of the date of this prospectus, certain of these arbitration proceedings have been settled. For information about these proceedings see “Public Sector Debt—Legal Proceedings—ICSID Arbitration.”

The Financial Stability Board

The Financial Stability Board (“FSB”) is an international body that monitors and makes recommendations about the global financial system. The FSB seeks to strengthen financial systems and increase the stability of international financial markets; it does so by coordinating with its members’ national financial authorities and international standard-setting bodies as they work toward developing strong regulatory, supervisory and other financial sector policies to promote international financial stability. The FSB aims to foster a level playing field by encouraging consistent implementation of these policies across sectors and jurisdictions.

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Argentina has been a member of the FSB since 2009, with participation of the Central Bank. In 2015, following a review of the FSB’s structure of representation, Argentina gained a second seat in the Plenary.

G-24

Argentina has been a member of the Group of Twenty-Four since the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24) was established in 1971. The purpose of the group is to coordinate the position of developing countries on monetary and development issues, particularly issues on the agendas of the IMF Committee and the Development Committee, and to ensure increased representation and participation of developing countries in negotiations on international monetary system reform.

MERCOSUR

Argentina is a founding member of the Southern Common Market (“MERCOSUR”), established in March 1991 with Brazil, Paraguay and Uruguay. In July 2012, the founding members (other than Paraguay) admitted the Republic of Venezuela as a full member of MERCOSUR, and in December 2013, Paraguay acknowledged Venezuela’s status as a full member. Accordingly, in addition to Argentina, MERCOSUR currently includes Brazil, Paraguay, Uruguay and Venezuela as full members or the “Member States.” In July 2015, Bolivia signed a protocol to become a full member of MERCOSUR, which remains subject to ratification by the congresses of Brazil, Paraguay and Bolivia. Upon approval, Bolivia will have a four-year period to gradually adopt MERCOSUR’s regulations.

Chile, Colombia, Ecuador and Peru are “Associate States” of MERCOSUR, having signed Free Trade Agreements (“FTAs”) with the trade bloc. In July 2013, Guyana and Suriname were admitted as new Associate States.

Under the Mercosur Treaty, the founding members of MERCOSUR originally pledged:

(1) to create a full common market in goods, services and factors of production by eliminating or significantly reducing, in some cases over a period of years, import duties, tariffs and other barriers to trade among members; and

(2) to establish common external tariffs for trade with non-members.

With the aim of transforming the region into a customs union, in December 1994, the founding members of MERCOSUR agreed to implement a common external tariff. The common external tariff regime took effect on January 1, 2001, however, each member was allowed to exclude certain items from the regime. The full implementation of the customs union has been deferred until 2024, as the exceptions period has been extended to allow Argentina and Brazil to maintain their list of exceptions until December 31, 2021, Uruguay until December 31, 2022, and Paraguay until December 31, 2023.

Since its establishment, MERCOSUR has entered into agreements with third parties to facilitate trade, including agreements: (i) establishing a free trade zone with Bolivia in 2006 and Chile in 2014; (ii) establishing a gradual free trade zone for certain goods between 2005 and 2020 with Colombia, Ecuador and Venezuela (which was agreed to prior to Venezuela’s membership); (iii) establishing a gradual free trade zone with Peru for certain goods between 2006 and 2021; (iv) eliminating tariffs beginning in 2008 and reducing tariffs beginning in 2009 with respect to certain goods traded with Cuba and India, respectively; and (v) eliminating tariffs for certain goods traded with Israel between 2009 and 2029. In accordance with MERCOSUR regulations, each of these agreements was negotiated by the Member States as a trade bloc.

In addition, as of the date of this prospectus, MERCOSUR and the European Union have re-launched negotiations relating to their 1995 framework agreement for the development of free trade.

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Following a suspension of negotiations in 2004, MERCOSUR and the United States have also resumed negotiations relating to the hemisphere-wide Free-Trade of the Americas Agreement (FTAA) pursuant to the 1991 “Four Plus One” Agreement.” These negotiations are ongoing as of the date of this prospectus.

UNASUR

Unión de Naciones Sudamericanas (South American Union of Nations, or “UNASUR”), is a South American organization, formed by 12 South American countries to foster integration and unity among the countries and their people, with the aim of eliminating socioeconomic inequality by prioritizing political dialogue (including the “democracy clause,” which suspends the membership of any country in which a sovereign government is removed through undemocratic means) social policies, education, energy, infrastructure, finance and the environment. Within UNASUR, the Counsel of Economy and Finance is responsible for analyzing economic topics of regional interest such as international reserves, financial safety nets, trade and economic development.

Banco del Sur

Banco del Sur, or “BdS,” is a development bank formed by seven South American member countries of UNASUR, which include Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay and Venezuela.

On September 27, 2009, the presidents of each of the seven founding member countries signed the Convenio Constitutivo (Articles of Agreement) to create BdS. On September 7, 2011, Argentina’s Congress ratified the Articles of Agreement of BdS, which became effective in April 2012. BdS’s authorized capital is U.S.$20 billion, and the founding member countries agreed to provide U.S.$7 billion in initial capital. The Ministers’ Council of the BdS met for the first time on June 13, 2013.

Sovereign Territorial Dispute

Argentina reaffirms its legitimate sovereignty rights over the Malvinas, South Georgias and South Sandwich Islands and the surrounding maritime areas, which are an integral part of its national territory. Due to the fact that these archipelagoes are illegally occupied by the United Kingdom, they are subject to a sovereignty dispute, recognized by ten United Nations General Assembly (the “General Assembly”) resolutions, more than 30 resolutions of the Special Committee on Decolonization and numerous pronouncement of the OAS and other international organizations and regional and bi-regional forums. In particular, the General Assembly has recognized the existence of a sovereignty dispute between Argentina and the United Kingdom and has requested both governments to resume negotiations in order to find a peaceful solution as soon as possible.

Many regional and international organizations have reiterated the importance of Argentina and the United Kingdom complying with the provisions of Resolution 31/49 of the General Assembly, which calls upon both parties to refrain from adopting decisions that entail the introduction of unilateral modifications to the situation while the dispute resolution process recommended by the General Assembly is ongoing.

Despite the repeated calls for negotiations made by the international community, the United Kingdom not only persistently refuses to negotiate, but also continues to take unilateral actions over the disputed areas, including the exploration for and exploitation of renewable and non-renewable natural resources.

In March 2011, the Argentine Congress passed Law No. 26,659 (the “Hydrocarbons Exploration Law”), which establishes the conditions for hydrocarbon exploration and exploitation in the Argentine continental shelf. The Hydrocarbons Exploration Law prohibits natural and legal persons authorized to conduct activities in Argentina from carrying out unauthorized hydrocarbons exploration activities in the Argentine continental shelf, and disqualifies those who violate the Hydrocarbons Exploration Law for periods of five to 20 years. In 2013, a series of administrative sanctions were adopted by Argentina, including the banning of six companies involved in illegal hydrocarbon activities from operating in Argentina for 15 to 20 years.

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Law No. 26,915, passed on November 27, 2013, amended the Hydrocarbons Exploration Law (specifically, the conditions applicable to hydrocarbon exploration and exploitation in the Argentine continental shelf), setting forth the liability, including criminal, civil and tax-related, of individuals and/or legal entities that conduct hydrocarbon exploration or exploitation activities on or below the sea bed of the Argentina territorial waters or continental shelf without the approval of the relevant Argentine authorities, in addition to all other pre-existing criminal penalties.

In April 2015, the Federal Court for Rio Grande commenced the first criminal proceedings under Law No. 26,915 against Rockhopper Exploration plc, Premier Oil plc, Falkland Oil and Gas Limited, Noble Energy Inc. and Edison International S.p.A. As of the date of this prospectus, such proceedings have not been concluded.

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THE ARGENTINE ECONOMY

Economic History and Background

Background

In the late 1800s and early 1900s, Argentina enjoyed a period of great prosperity, with per capita GDP rising to the level of many Western European countries. During this period of growth, Argentina’s economy relied heavily on sustained international demand for its agricultural commodity exports.

The onset of the Great Depression and World War II, however, brought dramatic changes in the Argentine economy as a decline in world trade deprived the country of its main source of revenue. The Government responded to these developments with a major shift in economic policy, adopting a model of state-led capitalism and import substitution. Accordingly, state intervention in the economy became pronounced.

Beginning in the 1940s, the Government nationalized many basic industries and services and raised import barriers in a bid to make Argentina self-sufficient in industry and agriculture and to shelter its economy from foreign competition. Government involvement in sectors ranging from oil and electricity to telecommunications and financial services became significant.

Although in the 1950s a new era of worldwide prosperity began, the Government’s role in the economy remained significant and Argentina experienced relatively low growth in comparison with other developing countries.

Although manufacturing had become the largest component of the economy by the mid-1970s, the country’s exports continued to be dominated by agricultural products. During this period, the Argentine economy continued to grow at substandard levels.

In 1976, the Government began to shift away from the import-substitution model, lowering import barriers and liberalizing restrictions on foreign borrowings. The adoption of a crawling-peg exchange rate regime by the Central Bank induced appreciation of the peso and incurrence of external indebtedness by the public and private sectors between 1977 and 1981. Despite this shift in policy, from 1981 through 1990, economic growth was undermined by:

• political instability;

• large subsidies of state-owned enterprises;

• high inflation;

• periodic devaluations of the currency;

• an inefficient tax collection system; and

• inefficient production.

From 1981 through 1990, the average annual real GDP contraction was 0.7%. The Government financed its fiscal deficits during this period primarily through Central Bank credit and loans from foreign bilateral and multilateral creditors. The increase in Central Bank credit to the Government resulted in unchecked increases in the money supply that led to high levels of inflation. From 1981 through 1990, average annual inflation was 876.0%. Additionally, in 1982 the Government defaulted on its external debt.

During the 1980s, the Government adopted several economic plans in an effort to stabilize the economy. While these plans achieved some initial success, they ultimately failed and the continued high levels of state intervention in the economy inhibited its competitiveness. These factors, combined with high levels of inflation, frequent changes in Government policy and financial market instability, prevented the Argentine economy from achieving real growth.

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Liberalization of the Economy. In mid-1989, the Menem administration inherited an economy suffering from hyperinflation and in deep recession. Relations with external creditors were strained, commercial bank debts had been subjected to two restructurings and were again accumulating past-due interest, IMF and World Bank programs had lapsed and payments to the World Bank and the IADB were frequently late. The immediate objectives of the Menem administration were to stabilize prices and improve relations with external creditors.

Following several unsuccessful efforts to stabilize the economy and end hyperinflation, the Menem administration adopted an economic program that sought to liberalize the economy and impose monetary discipline. The new economic program, which came to be known as the Convertibility Regime, was centered on the Convertibility Law of 1991 and related measures. Its principal features were the following:

• a fixed exchange rate regime that pegged the peso to the U.S. dollar and tied the monetary base to international reserves, limiting the Central Bank’s monetary policy tools;

• privatization, deregulation and trade liberalization programs; and

• the improvement of relations with external creditors (including by refinancing a substantial portion of the Government’s debt through the Brady restructuring in 1992).

The Convertibility Regime and the Government’s free-market initiatives temporarily achieved price stability, increased the efficiency and productivity of the Argentine economy and attracted significant foreign investment. Real GDP grew 9.1% in 1991 and 7.9% in 1992. From 1993 through 1998, real GDP grew at an average annual rate of 4.8%, despite a 2.8% contraction in 1995 largely attributable to the capital flight triggered by the Mexican financial crisis of 1994.

The Convertibility Regime, however, had significant shortcomings, including the following:

• Inflexible monetary policy. By stripping the Central Bank of its monetary discretion, the Convertibility Regime limited the use of monetary policy to stimulate the economy in response to downturns in economic activity.

• Dependence on foreign capital. Any sharp reduction of foreign capital inflows, often triggered by factors beyond the Government’s control, threatened untimely contractions of the money supply. Argentina’s dependence on foreign capital was heightened by the opening of the Argentine economy to foreign trade, which resulted in significant trade deficits, and by the Government’s recurring fiscal deficits, which were heavily financed with foreign capital.

• Vulnerability to external shocks. The dependence on foreign capital, coupled with the lifting of state controls on capital flows, made the Argentine economy vulnerable to external shocks.

• Over-reliance on certain economic sectors. As a result of the real appreciation of the peso and the peso’s peg to the U.S. dollar, economic growth during this period was driven by the services sector, and in particular the financial and public services sectors, with production-based manufacturing and industrial sectors lagging behind. In addition, any contribution from the agricultural sector from increased volume of production was offset by declining international commodity prices.

• Rising unemployment. Despite economic growth, the relative slow growth in labor intensive sectors such as construction and manufacturing increased unemployment levels.

The shortcomings of the Convertibility Regime became evident during the economic downturn triggered by the Mexican financial crisis of 1994. The collapse of Mexico’s crawling-peg exchange rate undermined investors’ confidence in emerging markets and raised doubts about the sustainability of the Convertibility Regime. This loss of confidence triggered a sharp reduction in net capital inflows, which turned into net capital outflows in 1995, causing a liquidity crisis in the Argentine banking system. As a result, Argentina experienced its first economic contraction since the Convertibility Regime had been implemented.

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Following the Mexican crisis, Argentina’s economy resumed the levels of growth it had recorded in the first half of the 1990s. From 1996 through 1998, GDP increased at an annual average rate of 5.8%. However, the Government relied heavily on borrowings, first from external sources and ultimately from the local banking system and the newly-organized private pension funds, to finance the deficit. Beginning in the last quarter of 1997, external factors, including regional financial crises in Asia and Russia, rising U.S. interest rates and falling commodity prices, caused the capital flows to turn negative, economic activity to decline sharply, ultimately precipitating the economic crisis of 2001.

The Crisis and Beginning of Recovery: 2001 and 2002

During the last six months of 2001, the growing perception that a devaluation of the peso was imminent triggered a massive run on bank deposits and a significant acceleration of capital flight from the Argentine economy. Total deposits in the Argentine banking system fell by 20.3% in the last six months of 2001 and the Central Bank’s international reserves fell by 42.1% in the same period.

In a last bid to safeguard the Convertibility Regime and avert the collapse of the banking sector, in December 2001, the Government imposed strict per-person, per-month limits on bank withdrawals (known as the corralito), effectively limiting the ability of depositors to withdraw approximately U.S.$60 billion in peso and dollar demand deposits from the financial system. It also imposed strict foreign exchange restrictions in Argentina. Shortly thereafter, the Government announced that it would defer interest and principal payments on a substantial portion of the Government’s debt.

Massive social unrest led to the early resignation of President de la Rúa’s administration and triggered a political crisis that culminated with the election of Mr. Eduardo Duhalde as president in January 2002. Congress passed the Public Emergency and Reform Law of 2002 (the “Public Emergency Law”) which formally terminated the parity between the peso and the U.S. dollar and brought the Convertibility Regime to an end. Through the enactment of the Public Emergency Law and a series of decrees, the Duhalde administration took the following measures:

• ratified the suspension of payments of Argentina’s sovereign debt except for debt with multilateral credit agencies;

• eliminated the dual exchange rate system adopted immediately following the end of the Convertibility Regime and replaced it with a single exchange rate that allowed the value of the peso to float against other currencies, resulting in a 240.1% increase in the U.S. dollar-peso exchange rate in 2002;

• ordered the “asymmetric” conversion into pesos (known as “pesification”) of certain U.S. dollar-denominated assets and liabilities at the following exchange rates: Ps. 1.00 per U.S.$1.00 for private sector debt (individual and corporate U.S. dollar-denominated debt) with financial institutions and other creditors, Ps. 1.40 per U.S.$1.00 for all U.S. dollar-denominated public sector debt instruments in the portfolios of national and provincial financial institutions’ portfolios and Ps. 1.40 per U.S.$1.00 for all U.S. dollar-denominated bank deposits;

• amended the charter of the Central Bank to allow it to print currency, make certain short-term advances to the Government and act as a lender of last resort to financial institutions experiencing liquidity difficulties; and

• imposed further restrictions on bank withdrawals (known as the corralón) until December 2002, which effectively froze all term deposits and subjected them to mandatory restructuring.

Additionally, further restrictions on foreign exchange transactions were introduced in 2002, including:

• limits on the amount of U.S. dollars that could be held per month in bank accounts;

• limits on transfers of foreign currency outside of Argentina; and

• restrictions on foreign trade transactions.

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The economic crisis peaked during the first six months of 2002. During this period, economic activity collapsed with the largest contraction in the level of economic activity in Argentine history, fiscal revenues fell, inflation rose significantly and the financial system’s liquidity crisis worsened. In addition to the controls over the foreign exchange market, the Government imposed mandatory repatriation of export proceeds. Strict foreign exchange controls, together with a significant surplus in the country’s trade balance, ensured a supply of foreign currency to the market and resulted in the appreciation of the peso in the second half of the year.

By the middle of 2002, the policy of combining the sale of international reserves with the tightening of controls over the foreign exchange market and capital movements succeeded in stabilizing the peso. As the domestic currency stabilized, inflationary pressures declined. This, combined with the expansion of the monetary base, permitted a gradual stabilization of interest rates, which had sharply increased following the end of the Convertibility Regime.

During the last six months of 2002, real GDP contraction had slowed to 6.7%, as compared to the last six months of 2001, and Argentina recorded a U.S.$5.0 billion surplus in its current account. As of December 31, 2002:

• the peso had appreciated to Ps. 3.36 per dollar, compared to a low of Ps. 3.87 on June 26, 2002;

• inflation, as measured by INDEC CPI, was 8.0% for the six month period ended December 31, 2002, compared to 30.5% for the six-month period ended June 30, 2002. In 2002, inflation, as measured by INDEC CPI was 40.9% and as measured by the wholesale price index (“WPI”) was 118.0%, which, although significant, was relatively low in comparison to the more than 240.1% depreciation of the peso against the U.S. dollar during that year; and

• the Central Bank’s international reserves had increased to U.S.$10.5 billion, from U.S.$9.6 billion on June 30, 2002.

Despite the improvement in economic conditions during the last six months of 2002, overall GDP declined 10.9% for the year compared to 2001.

To prevent the continued appreciation of the peso, the Central Bank eased certain of the foreign exchange restrictions imposed between November 2002 and January 2003. The improved economic conditions, in particular the reduction in capital flight from the Argentine economy, also allowed the Government to begin lifting restrictions on bank withdrawals in November 2002.

By the end of 2002, the economy seemed to have bottomed out from the crisis and the recession that began in 1998. However, the recovery was set against extremely depressed levels of economic activity, similar to those of the early 1990s. In addition, the recovery was the result of a set of economic policies aimed mainly at managing the crisis, but failed to include structural reforms needed to generate sustainable long-term economic growth.

The Kirchner Administration: 2003-2007

Néstor Kirchner became president of Argentina on May 25, 2003. The economic recovery that began in the last six months of 2002 continued during 2003, with GDP growing by 8.8% in 2003. This improvement was primarily a result of a growth in demand for Argentine exports, increased domestic production spurred by improved consumer and investor confidence and the substitution of imported products with domestic products. During the first year of the Kirchner administration, quasi-currencies (treasury bonds issued by the Argentine provinces during the economic crisis) were withdrawn from circulation and restrictions on bank deposits were lifted. In the same year, renewed confidence in the financial system was evidenced by a 24.0% increase in nominal terms in total bank deposits.

The Argentine economy continued to grow in 2004, 2005, 2006 and 2007 at rates of 9.0% (representing the rate of change from 2003 to 2004, calculated using data published by the INDEC prior to June 29, 2016), 8.9%,

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8.1% and 9.0%, respectively. During this period, the international reserves of the Central Bank increased to Ps. 145.5 billion as of December 31, 2007, compared to Ps. 41.4 billion as of December 31, 2003. The Kirchner administration’s fiscal and trade policies aimed to generate a fiscal surplus as well as a trade surplus. In each of 2004, 2005 and 2006, Argentina recorded a trade surplus while the Government generated fiscal surpluses primarily through increased tax collections contributed by exports. Inflationary pressures increased in 2007 and through mid-2008 as a result of growing demand and continued supply constraints.

Fernández de Kirchner’s Administration: 2008-2015

Cristina E. Fernández de Kirchner, the wife of former President Néstor Kirchner, became president of Argentina on December 10, 2007, and was reelected in 2011, extending her term in office until December 2015.

The strong economic rebound that took place in Argentina between 2003 and 2007 began to fade during the first half of 2008. President Fernández de Kirchner sought a one-year extension of the Public Emergency Law in December 2007, which empowered the administration to govern a broad range of issues without congressional approval. The Fernández de Kirchner administration continued, and over time expanded, the interventionist economic policies of the prior administration, including expansionary fiscal and monetary policies aimed at maintaining economic growth rates, as well as price controls, tariff limits, subsidies and export taxes.

In March 2008, a series of hikes in export taxes on agricultural products sparked a five-month conflict with farmers. By the third quarter of 2008, the Argentine economy began to experience a downturn that was aggravated by the escalation of the global financial crisis. In November 2008, Congress approved a law nationalizing the private pension system in Argentina, under which the assets held by private pension funds, including significant equity interests in a wide range of listed companies, were transferred to a separate fund as part of a new public system administered by the ANSES. Argentina experienced episodes of bank deposit withdrawals and capital outflows in 2008. The Central Bank raised interest rates to limit capital outflows from Argentina just as the economic downturn set in, which, in turn, exacerbated the downturn in the economy.

By mid-2009, public finances had rapidly deteriorated, with public expenditures growing at double the pace of revenue during the first half of the year as the Government attempted to limit the effects of the recession. Private estimates of economic activity showed contractions between 2.5% and 6.0% during the first six months of 2009. The Fernández de Kirchner administration lost control of both houses of Congress in the midterm legislative elections held in June 2009.

Although economic activity began to recover during the fourth quarter of 2009 due, in large part, to growth in industrial activity, public finances continued to weaken. Extraordinary revenue, including social security contributions and public transfers from government agencies such as the Central Bank and ANSES, played a key role in supporting the 19% rise in total public sector revenue in 2009. During 2009, however, social tension continued to increase. In response to opposition and left-wing union demands, the Government announced the extension of two anti-poverty programs—a family allowance for formal sector workers earning less than a monthly threshold and income support for informal sector workers and the unemployed.

In late 2009, the Government issued a Decreto de Necesidad y Urgencia (emergency decree) making foreign reserves held by the Central Bank available for external debt payments. Resistance from the Central Bank’s president, Mr. Martín Redrado, to transfer Central Bank reserves for this use led to a standoff between the administration and the Central Bank, which ultimately resulted in Mr. Redrado’s resignation in January 2010 and renewed concerns over governability, political stability and debt sustainability.

Inflationary pressures rose rapidly in early 2010 as the Central Bank initiated its practice of providing financing to the Government to cover a portion of the fiscal deficit. The INDEC reported that 12-month inflation had reached 9.1% in February 2010, while private surveys estimated that inflation had reached between 20 to 25% during the same period. At the same time, the economy began to show signs of recovery, as industrial

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output increased. The Argentine economy grew by 10.1% in 2010, reaching the highest level of growth since 2005. This growth was primarily driven by high commodity prices, a rapid rise in wages, the appreciation of the peso and higher levels of inflation, which spurred growth in construction and investments in durable equipment. Growth in private consumption was, to a significant extent, attributable to continued increases in Government subsidies and transfers during the year (including through the administration’s anti-poverty programs). In contrast, the current account deteriorated during 2010, with the current-account surplus falling from U.S.$8.2 billion in 2009 to a deficit of U.S.$1.5 billion in 2010, as the trade surplus, a key source of foreign currency, narrowed by more than 20% in 2010.

In June 2010, the Government conducted the 2010 Debt Exchange to restructure Untendered Debt, with an acceptance rate of 81%. Although approximately 92% of Argentina’s defaulted debt was restructured through its 2005 and 2010 Debt Exchanges, an aggregate principal amount of approximately U.S.$6.1 billion of Untendered Debt remained outstanding following these debt restructuring initiatives and litigation with the holdout creditors continued.

The Central Bank continued its expansionary monetary policy in 2011, particularly through its purchases of foreign currency and lending to the Treasury. The Central Bank additionally continued its sterilization efforts to support the peso through the issuance of Central Bank notes (LEBACs and NOBACs).

Shortly after her reelection in October 2011, the Fernández de Kirchner administration introduced a series of capital and foreign-exchange controls intended to increase foreign currency supply and reduce foreign currency demand. During the 12-month period ending in December 2011, capital outflows were estimated to have reached U.S.$25 billion, or nearly half of the Central Bank’s foreign reserves. As a result, demand for U.S. dollars increased, leading to an increase in the gap between the official and unofficial exchange rates.

Argentina also began to experience energy shortages in 2011, following years of very limited investment in the energy sector, as well as the electricity and natural gas tariff-freeze maintained since 2002 as part of the Government’s emergency measures. Between 2008 and 2011, subsidies to the energy and transport sectors had increased by 156% as the energy foreign trade deficit grew. The public sector recorded a deficit of Ps. 30.7 billion in 2011 compared to a public-sector surplus of Ps. 3.1 billion in 2010.

With the support of Congress, which came under the control of President Fernández de Kirchner’s party with the October 2011 general election, the Government continued its interventionist policies in 2012. In the wake of narrowing fiscal and external surpluses and slowing economic activity, in April 2012, the Government announced an amendment to the Central Bank’s charter, which increased its discretion in policymaking and provided it with additional tools to intervene in the financial system, including in pursuit of its new aim of promoting economic growth with social equity. In May 2012, Congress approved the administration’s bill to nationalize 51% of the shares of the country’s largest oil company, YPF S.A. (“YPF”) which was majority-owned by Spain’s Repsol S.A. (“Repsol”).

In mid-2012, new restrictions on the purchase of foreign currency were introduced. The Government’s attempts to shore up foreign reserves were primarily driven by its dual goals of accumulating U.S. dollars to service its external debt obligations and maintaining a buffer to avoid a currency run in the event of a deterioration of global market conditions or sharp slowdown of domestic economic activity.

There was a marked deceleration of economic activity in 2012, as real GDP contracted by 1.0%, compared to an expansion of 6.0% in 2011. The year was also marked by rising social unrest, with major antigovernment protests held across the country and the first 24-hour general strike since 2003, reflecting growing dissatisfaction with the sharp economic slowdown, persistent high inflation and increasingly restrictive foreign-exchange controls.

During 2012, the primary balance fell sharply to a deficit of Ps. 4.4 billion—the first deficit since 1996—from a surplus of Ps. 4.9 billion in 2011, as expansionary fiscal policies that relied in part on Central Bank

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financing failed to prevent an economic slowdown and a decrease in tax revenue growth. The overall fiscal deficit represented an estimated 2.1% of GDP in 2012.

Facing continued social unrest, in June 2013, the Fernández de Kirchner administration announced an increase in social transfers through two programs providing child allowances to households based on certain income thresholds. In an ongoing attempt to stem inflation, in June 2013, the Government announced price freezes that covered approximately 500 products (including food, beverages, cleaning products and toiletries) for an initial three-month period, which was subsequently extended through a series of price freezes into 2014. The economy experienced moderate growth in 2013, as real GDP grew 2.4% compared to the previous year. Nevertheless, the poverty rate is estimated to have increased above 20% during the same period.

In January 2014, the Central Bank allowed the peso to depreciate by a nominal 7% in one day—the largest correction to occur in a single day since the 2001-2002 crisis—as international reserves fell below U.S.$30 billion. Shortly thereafter, the Government announced an easing of certain foreign-exchange controls. In an effort to tame inflation, the Government also launched the Precios Cuidados program in January 2014, which established price controls on a broad range of basic household and other products.

In February 2014, the Government and Repsol reached an agreement on the terms of the compensation payable to Repsol for the expropriation of the YPF shares. Such compensation totaled U.S.$5.8 billion payable by delivery of Argentine sovereign bonds with various maturities. The agreement, which was ratified by Law No. 26,932, settled the claim filed by Repsol with the ICSID.

In May 2014, the Government reached a settlement agreement with the members of the Paris Club, a group of sovereign creditors, in connection with outstanding debt owed to Paris Club members on which the Government had defaulted during the 2001-2002 economic crisis. In accordance with the terms of the agreement, the total outstanding debt will be canceled over a five-year period. See “Public Sector Debt—Debt Record—Paris Club.”

By mid-2014, INDEC data revealed that the Argentine economy was in recession. This data was based on the new methodology established by the INDEC in February 2014 in response to the IMF’s censure of Argentina in 2013 for failing to provide accurate statistics in accordance with the IMF’s articles of agreement. Although this new methodology brought the INDEC’s statistics closer to those estimated by private sources, differences between official data and private estimates remained.

In June 2014, the Government was constrained by an order of the District Court ruling that it make ratable payments to holdout creditors whenever it repays holders of its bonds issued pursuant to the 2005 and 2010 Debt Exchanges (the “2005 and 2010 Exchange Bonds”). The Government refused to comply with the District Court’s order and was prevented, by operation of the court’s injunction, from making payments to holders of certain of its restructured bonds issued under New York law. This event prevented Argentina from regaining access to the international capital markets, thereby increasing the risk of a balance-of-payment crisis.

In August 2014, a 24-hour general strike, triggered by increasing unemployment and a fall in real wages, halted public transport and key services. A trend in declining industrial output that began in the third quarter of 2013 continued through 2014, as the country’s manufacturing, mining and utilities sectors faced an erosion of consumer and business confidence, continued high inflation and waning demand from Argentina’s biggest export market, Brazil. By October 2014, the gap between the official and unofficial foreign currency exchange rates widened to 80%. In 2014, the fiscal deficit continued to grow, as total expenditure growth outpaced revenue growth, primarily as a result of an increase in the Government’s social benefit and pension payments.

Between mid-2014 and March 2015, the premium for U.S. dollars offered in the unofficial market narrowed from approximately 80% to 55%. This premium reduction reflected the temporary boost provided by a U.S.$10.3 billion three-year currency-swap agreement between the Central Bank and the People’s Bank of

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China, as well as the Central Bank’s issuance of U.S. dollar-denominated local bonds. However, the Government failed to address underlying fiscal and external imbalances. During 2014, the overall fiscal deficit rose to Ps. 109.7 billion, representing a 70% increase compared to 2013. In total, primary spending rose by 41.8%, with transfers to the private sector, particularly in the form of energy subsidies and social aid, driving this expansion. Real GDP contracted by 2.5% in 2014.

With global capital markets closed to Argentina since the 2001 sovereign default, a trade surplus fueled by high international commodity prices remained the main source of foreign currency reserves for the Central Bank for over a decade. However, exports were undermined in 2014 by continuing external competitiveness problems, falling commodity prices and an economic slowdown in Brazil, Argentina’s primary market for manufactured exports. In total, export earnings fell by 10% in 2014. Although imports also fell substantially, the trade surplus narrowed to U.S.$6.0 billion. Inflows of foreign currency during 2014, including through currency swap agreements entered into by the Central Bank with the People’s Bank of China, increased international reserves, leading to the first annual increase in the balance of payments since 2010.

In 2015, the Government continued to spend heavily, prioritizing fiscal expansion ahead of the general election in October. The continued growth in Government spending contributed to a modest recovery of the Argentine economy beginning in the first quarter of 2015. Despite a deceleration of inflation, monetary expansion accelerated in the first half of 2015. During 2015, the monetary supply rose by 30.2%, compared to a 20.5% increase in 2014. The difference between 2014 and 2015 reflected a change in the Central Bank’s sterilization policy: in 2014, the Central Bank sterilized Ps. 94.6 billion and raised interest rates on Central Bank notes (LEBACs), whereas sterilization fell significantly to Ps. 8.7 billion during 2015 as a decrease in the LEBAC rate reduced investments by the financial system in Central Bank notes. In a move to boost consumption, in July 2015, the minimum wage was increased by 31.4%—the first major increase since September 2014.

By mid-2015, China had become an important trading partner (as Argentina’s second-largest export destination after Brazil) and source of foreign exchange, particularly in light of the Government’s inability to access the international capital markets. As a result, the depreciation of the renminbi led the Government to tighten foreign-exchange controls in August 2015, with a view to protecting its international reserves and avoiding a currency crisis. In an effort to avoid a peso devaluation before leaving office in December 2015, the Fernández de Kirchner administration further tightened foreign exchange controls and raised interest rates in November 2015.

Principal Government Policies and their Impact on Argentina’s Economy (2011-2015)

The Fernández de Kirchner administration failed to change policies that were introduced as temporary, emergency measures in response to the 2001-2002 economic crisis (including foreign exchange controls, export taxes and the freeze on electricity and natural gas tariffs). Increasing intervention by the Government in the economy through price controls and measures designed to discourage substitute imports, as well as exports of certain products, and an increased tax burden on productive activities had the effect of reversing the upward trend in the competitiveness of Argentina’s commodities exports and total manufacturing activities. At the same time, the expropriation of domestic corporations, strict capital controls and the related appreciation of the peso in real terms discouraged investment. The administration’s systematic use of expansionary monetary and fiscal policies throughout the business cycle promoted chronic high inflation. Domestic savings and the development of local capital markets were undermined by the imposition of negative real interest rates. The macroeconomic imbalances that resulted from inconsistent macroeconomic policies and the unresolved litigation with holders of Untendered Debt limited the Republic’s access to international capital markets, resulting in the Government’s growing dependence on Central Bank peso financing and the use of Central Bank foreign currency reserves to service public debt. President Fernández de Kirchner’s policies increasingly eroded businesses’ confidence in the Argentine economy, which resulted in a lack of investment, capital outflows and a significant decline in the Central Bank’s international reserves.

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The principal government policies of the Fernández de Kirchner administration and their primary effects were as follows:

1. Expansionary monetary policy and foreign exchange controls. An expansionary monetary policy and pervasive foreign exchange controls, coupled with an unwillingness to allow the peso to float freely, resulted in a real appreciation of the peso and a loss of competitiveness of Argentine production. The expansionary monetary policy fueled inflation (which grew from 9.5% in 2011 to 24.0% in 2014, as measured by the INDEC CPI, or from 23.3% in 2011 to 39.0% in 2014, as measured by the Province of San Luis CPI).

2. Increased regulation to confront inflationary pressures. In response to accelerating inflation, the Fernández de Kirchner administration resorted to measures aimed at controlling supply, rather than reining in demand. These measures included discretionary subsidies, export restrictions and price controls. These measures created additional distortions in relative prices and deterred long-term investment in key sectors of the Argentine economy, including the energy sector.

3. Discouraged investments. The real appreciation of the peso and foreign exchange controls adversely affected investment generally. In the energy sector, the lack of investment was exacerbated by the Government’s unwillingness to correct utility tariffs that had remained frozen for the Greater Buenos Aires Area (approximately 15 million inhabitants) since the 2001-2002 economic crisis. Argentina—once a net exporter of energy—became a net importer in 2011 with total energy imports of U.S.$6.5 billion in 2014 and U.S.$4.6 billion in 2015. The Government’s reluctance to adjust tariffs and its decision to subsidize energy consumption resulted in direct and indirect transfers to the energy sector, increasing from Ps. 50.3 billion in 2011 to Ps. 161.2 billion in 2015.

4. Expanding public expenditures. Expanding expenditures by the public sector resulting from a policy of heavily subsidizing energy and transport, the increase in employment through the creation of public sector employment, a broadening of pension benefits and a significant expansion of social welfare benefits eroded the fiscal surplus created between 2003 and 2009, and resulted in rising primary fiscal deficits beginning in 2012 (0.2% of GDP), which, by December 2015, grew to 1.8% of GDP for 2015.

5. Dependence on Central Bank financing. The Fernández de Kirchner administration relied on the Central Bank to finance a growing portion of the Government’s deficit (from a surplus of Ps. 4.9 billion in 2011 to a deficit of Ps. 104.8 billion in 2015). Advances to the Government further increased inflationary pressures, while the recurrent use of the Central Bank’s U.S. dollar-denominated reserves to make payment on the Government’s foreign debt caused international reserves to decline substantially. As of December 31, 2015, the Central Bank´s international reserves stood at U.S.$25.6 billion, compared to U.S.$46.4 billion as of December 31, 2011.

Macri Administration: 2015-Present

Presidential and congressional elections in Argentina took place on October 25, 2015, and a runoff election between the two leading presidential candidates was held on November 22, 2015, resulting in Mr. Mauricio Macri (from the Cambiemos coalition) being elected President of Argentina. The Macri administration assumed office on December 10, 2015.

Since assuming office, the Macri administration has announced and executed several significant economic and policy reforms, including:

• Foreign exchange reforms. The Macri administration eliminated substantially all of the foreign exchange restrictions, including certain currency controls, that were imposed by the Fernández de Kirchner administration. These reforms are expected to provide greater flexibility and easier access to the foreign exchange market (MULC). See “Defined Terms and Certain Conventions—Exchange Rates and Exchange Controls—Exchange Controls” for a description of the principal measures adopted as of the date of this prospectus.

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• INDEC reforms. On January 8, 2016, based on its determination that the INDEC had failed to produce reliable statistical information, particularly with respect to CPI, GDP, poverty and foreign trade data; President Macri declared a state of administrative emergency for the national statistical system and the INDEC until December 31, 2016. On June 29, 2016, the INDEC published the INDEC Report including revised GDP data for the years 2004 through 2015. For more information, see “Presentation of Statistical and Other Information—Certain Methodologies.”

• Financial policy. Soon after taking office, the Macri administration sought to settle the outstanding claims with the holders of Untendered Debt, and the Minister of the Treasury designed a debt restructuring and cancellation program with the aim of reducing the amount of outstanding Untendered Debt. In February 2016, the Republic entered into agreements in principle to settle outstanding claims with certain holders of Untendered Debt and put forward a proposal to other holders of Untendered Debt, including those with pending claims in U.S. courts, subject to two conditions: obtaining approval by the Argentine Congress and lifting the pari passu injunctions. On March 2, 2016, the District Court agreed to vacate the pari passu injunctions, subject to two conditions: first, the repealing of all legislative obstacles to settlement with holders of Untendered Debt, and second, full payment to holders of pari passu injunctions with whom the Government had entered into agreements in principle on or before February 29, 2016, in accordance with the specific terms of such agreements. On April 13, 2016, the District Court’s order was affirmed by the Second Circuit Court of Appeals. On March 31, 2016, the Argentine Congress repealed the legislative obstacles to the settlement and approved the Settlement Proposal. Argentina closed the April 2016 Transaction on April 22, 2016 and applied U.S.$9.3 billion of the net proceeds to satisfy settlement payments on agreements of holders of approximately U.S.$4.2 billion principal amount of Untendered Debt. Upon confirmation that the conditions set forth in its March 2, 2016 order had been satisfied, the District Court ordered the vacatur of all pari passu injunctions. Argentina subsequently issued bonds in aggregate amount of U.S.$2.75 billion on July 6, 2016.

• Foreign trade reforms. The Kirchner and Fernández de Kirchner administrations imposed export duties and other restrictions on several sectors, particularly the agricultural sector. The Macri administration eliminated export duties on wheat, corn, beef, mining and regional products, and reduced the duty on soybean exports by 5%, from 35% to 30%. Further, a 5% export duty on most industrial exports was eliminated. With respect to payments for imports and services to be performed abroad, the Macri administration announced the gradual elimination of restrictions on access to the MULC for any transactions originated before December 17, 2015. Regarding transactions executed after December 17, 2015, no quantitative limitations remain in effect.

• Fiscal policy. The Macri administration took steps to anchor the fiscal accounts, reducing the primary fiscal deficit by approximately 1.8% of GDP in December 2015 through a series of tax and other measures, and pursues a primary fiscal deficit target of 4.8% of GDP in 2016 through the elimination of subsidies and the reorganization of certain expenditures.

• Correction of monetary imbalances. The Macri administration announced the adoption of an inflation targeting regime in parallel with the floating exchange rate regime and set inflation targets for the next three years. The Central Bank has increased sterilization efforts to reduce excess monetary imbalances and raised peso interest rates to offset inflationary pressure. However, inflation has remained high in 2016.

• National electricity state of emergency and reforms. Following years of very limited investment in the energy sector, as well as the continued freeze on electricity and natural gas tariffs since the 2001-2002 economic crisis, Argentina began to experience energy shortages in 2011. In response to the growing energy crisis, President Macri declared a state of emergency with respect to the national electricity system, which will remain in effect until December 31, 2017. The state of emergency allows the Government to take actions designed to ensure the supply of electricity to the country, such as instructing the Ministry of Energy and Mining to design and implement, with the cooperation of all

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federal public entities, a coordinated program to guarantee the quality and security of the electricity system. In addition, through Resolution No. 6/2016 of the Ministry of Energy and Mining and Resolution No. 1/2016 of the Ente Nacional Regulador de la Electricidad (National Electricity Regulatory Agency), the Macri administration announced the elimination of a portion of energy subsidies in effect and a substantial increase in electricity rates. As a result, average electricity prices have already increased and could increase further. By correcting tariffs, modifying the regulatory framework and reducing the Government’s role as an active market participant, the Macri administration aims to correct distortions in the energy sector and stimulate investment. However, certain of the Government’s initiatives have been challenged in the Argentine courts and resulted in judicial injunctions or rulings limiting the Government’s initiatives.

This fiscal, monetary and currency adjustments undertaken by the Macri administration may subdue growth in the short term, but seek to guide the economy toward a sustained path for growth in the medium-term. Immediately after the foreign exchange controls were lifted on December 16, 2015, the dismantling of the multiple exchange regime resulted in the official peso exchange rate (available only for certain types of transactions) adjusting in value by 40.1%, as the peso-U.S. dollar exchange rate reached Ps. 13.76 to U.S.$1.00 on December 17, 2015. The Central Bank has since allowed the peso to float with limited intervention intended to ensure the orderly operation of the foreign exchange market. On December 31, 2016, the exchange rate was Ps. 15.85 to U.S.$1.00.

Gross Domestic Product and Structure of the Economy

GDP is a measure of the total value of final products and services produced in a country. Nominal GDP measures the total value of final production in current prices. Real GDP measures the total value of final production in constant prices of a particular year, thus allowing historical GDP comparisons that exclude the effects of inflation. Argentina’s real GDP figures are measured in pesos and are based on constant 2004 prices, as revised in the INDEC Report. Among other adjustments, in calculating GDP for 2004 the INDEC made changes to the composition of GDP that resulted in a downward adjustment of approximately 12% for that year. In calculating real GDP for subsequent years based on the revised 2004 GDP, the INDEC used deflators that are consistent with its revised methodology to calculate inflation. By understating inflation in the past, the INDEC had overstated growth in real terms.

The information set forth below in this section has been derived from statistics included in the INDEC Report.

The following table sets forth the evolution of GDP and per capita GDP for the periods specified, at current prices.

Evolution of GDP and Per Capita GDP

(at current prices)

	2011		2012		2013		2014		2015
GDP (in millions of pesos)(1)		Ps.    2,179,024		Ps.    2,637,914		Ps.    3,348,308		Ps.    4,579,086		Ps.    5,854,014
GDP (in millions of U.S. dollars)(1)		U.S.$   527,580		U.S.$   579,573		U.S.$   611,129		U.S.$   564,009		U.S.$   631,574
Per capita GDP(1)		U.S.$     12,786		U.S.$     13,888		U.S.$     14,481		U.S.$     13,218		U.S.$     14,643
Peso / U.S. dollar exchange rate(2)		4.13		4.55		5.48		8.12		9.27

(1) GDP figures in this table are expressed in nominal terms.

(2) Average nominal exchange rate for the period specified.

Source: INDEC and Ministry of the Treasury.

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The following tables set forth information on Argentina’s real GDP, by expenditure, for the periods specified, at constant 2004 prices.

Composition of Real GDP by Expenditure

(in millions of pesos, at constant 2004 prices)

	2011			2012			2013			2014			2015
Consumption:
Public sector consumption	Ps.	81,035		Ps.	83,473		Ps.	87,916		Ps.	90,505		Ps.	96,649
Private consumption		501,647			507,217			525,675			502,764			520,536
Total consumption		582,682			590,690			613,591			593,270			617,185
Gross investment		153,584			142,718			146,057			136,190			141,421
Exports of goods and services		161,537			154,900			149,447			139,017			138,241
Imports of goods and services		192,160			183,074			190,183			168,350			177,962
Net exports/(imports)		(30,623	)		(28,174	)		(40,735	)		(29,333	)		(39,720	)
Inventory provision		5,139			(1,748	)		1,495			2,179			2,012
Statistical discrepancy		—			—			—			—			—
Real GDP	Ps.	710,782		Ps.	703,486		Ps.	720,407		Ps.	702,306		Ps.	720,898

Source: INDEC and Ministry of the Treasury.

Composition of Real GDP by Expenditure

(as % of total real GDP, at constant 2004 prices)

	2011			2012			2013			2014			2015
Consumption:
Public sector consumption		11.4	%		11.9	%		12.2	%		12.9	%		13.4	%
Private consumption		70.6			72.1			73.0			71.6			72.2
Total consumption		82.0			84.0			85.2			84.5			85.6
Gross investment		21.6			20.3			20.3			19.4			19.6
Exports of goods and services		22.7			22.0			20.7			19.8			19.2
Imports of goods and services		27.0			26.0			26.4			24.0			24.7
Net exports/(imports)		(4.3	)		(4.0	)		(5.7	)		(4.2	)		(5.5	)
Inventory provision		0.7			(0.2	)		0.2			0.3			0.3
Statistical discrepancy		—			—			—			—			—
Real GDP		100.0	%		100.0	%		100.0	%		100.0			100.0	%

Source: INDEC and Ministry of the Treasury.

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Evolution of Real GDP by Expenditure

(% change from previous year, at constant 2004 prices)

	2011			2012			2013			2014			2015
Consumption:
Public sector consumption		4.6	%		3.0	%		5.3	%		2.9	%		6.8	%
Private consumption		9.4	%		1.1	%		3.6	%		(4.4	%)		3.5	%
Total consumption		8.7	%		1.4	%		3.9	%		(3.3	)		4.0	%
Gross investment		17.4	%		(7.1	)		2.3	%		(6.8	)		3.8	%
Exports of goods and services		4.1			(4.1	)		(3.5	)		(7.0	)		(0.6	)
Imports of goods and services		22.0			(4.7	)		3.9			(11.5	)		5.7	%
Net exports/(imports)		(1.192.4	)		8.0			(44.6	)		28.0			(35.4	)
Inventory provision		(12.5	)		(134.0	)		185.5	%		45.7	%		(7.7	)
Statistical discrepancy		—			—			—			—			—
Real GDP		6.0	%		(1.0	)		2.4			(2.5	)		2.6

Source: INDEC and Ministry of the Treasury.

The following tables set forth information on Argentina’s gross investment, by expenditure, for the periods indicated, at constant 2004 prices.

Composition of Gross Investment (in millions of pesos, at constant 2004 prices)

	2011		2012		2013		2014		2015
Natural Resources and others(1)		487		495		528		529		537
Durable equipment for production
Machinery and equipment:
National		24,211		22,710		23,926		21,605		23,287
Imported		41,890		36,440		35,173		33,804		35,785
Total		66,101		59,151		59,099		55,408		59,072
Transport products
National		12,234		12,540		13,521		10,273		10,703
Imported		7,726		5,603		7,479		6,160		5,816
Total		19,961		18,143		21,000		16,433		16,519
Total durable equipment for production		86,062		77,294		80,099		71,841		75,591
Construction(2)		67,035		64,929		65,429		63,819		65,293
Total gross investment		153,584		142,718		146,057		136,190		141,421

(1) Includes research and development and cultivated biological resources.

(2) Includes mining exploration.

Source: INDEC and Ministry of the Treasury.

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Composition of Gross Investment

(as % of total Gross Investment, at constant 2004 prices)

	2011			2012			2013			2014			2015
Natural Resources and others(1)		0.3	%		0.3	%		0.4	%		0.4	%		0.4	%
Durable equipment for production
Machinery and equipment:
National		15.8	%		15.9	%		16.4	%		15.9	%		16.5	%
Imported		27.3	%		25.5	%		24.1	%		24.8	%		25.3	%
Total		43.0	%		41.4	%		40.5	%		40.7	%		41.8	%
Transport products
National		8.0	%		8.8	%		9.3	%		7.5	%		7.6	%
Imported		5.0	%		3.9	%		5.1	%		4.5	%		4.1	%
Total		13.0	%		12.7	%		14.4	%		12.1	%		11.7	%
Total durable equipment for production		56.0	%		54.2	%		54.8	%		52.8	%		53.5	%
Construction(2)		43.6	%		45.5	%		44.8	%		46.9	%		46.2	%
Total gross investment		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

(1) Includes research and development and cultivated biological resources.

(2) Includes mining exploration.

Source: INDEC and Ministry of the Treasury.

Evolution of Gross Investment

(% change from previous year, at constant 2004 prices)

	2011			2012			2013			2014			2015
Natural Resources and others(1)		0.5	%		1.6	%		6.7			0.2			1.5
Durable equipment for production
Machinery and equipment:
National		21.2	%		(6.2	)		5.4			(9.7	)		7.8
Imported		25.1	%		(13.0	)		(3.5	)		(3.9	)		5.9
Total		23.6	%		(10.5	)		(0.1	)		(6.2	)		6.6
Transport products
National		21.5	%		2.5			7.8			(24.0	)		4.2
Imported		41.9	%		(27.5	)		33.5			(17.6	)		(5.6	)
Total		28.7	%		(9.1	)		15.7			(21.7	)		0.5
Total durable equipment for production		24.8	%		(10.2	)		3.6			(10.3	)		5.2
Construction(2)		9.2	%		(3.1	)		0.8			(2.5	)		2.3
Total gross investment		17.4			(7.1	)		2.3			(6.8	)		3.8

(1) Includes research and development and cultivated biological resources.

(2) Includes mining exploration.

Source: INDEC and Ministry of the Treasury.

Overview of GDP

In 2011, Argentina’s real GDP increased by 6.0%, primarily as a result of (i) a 17.4% increase in gross investment, mainly due to a 24.8% increase in investments in durable equipment for production and an 9.2% increase in construction investments; and (ii) an 8.7% increase in total consumption, resulting from an 9.4%

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increase in private sector consumption and a 4.6% increase in public sector consumption. These factors were partially offset by a 22.0% increase in imports, driven by the expansion of economic activity, which resulted in a negative trade balance.

In 2012, Argentina’s real GDP contracted 1.0%. This economic slowdown was attributed to local and external factors, primarily the deceleration of growth in developing economies, including Argentina’s principal trading partners, and an extended drought affecting agricultural production. Real GDP contraction in 2012 was primarily attributable to a 7.1% decline in gross investment resulting from a 10.2% decrease in investments in durable equipment for production and a 3.1% decrease in construction investments. However, this decline partially offset by an 8.0% increase in net exports.

Following GDP contraction in 2012, Argentina’s real GDP growth recovered in 2013 at a rate of 2.4%. Domestic demand in 2013 helped to offset weak demand from the rest of the world. Real GDP growth in 2013 was primarily driven by a 3.9% increase in total consumption, resulting from a 5.3% increase in public sector consumption and a 3.6% increase in private sector consumption, as well as a 2.3% increase in gross investment due to a 3.6% increase in investments in durable equipment of production and a 0.8% increase in construction investments.

In 2014, Argentina’s real GDP decreased by 2.5%, reflecting the impact of the deceleration of growth in developing economies on Argentina’s exports, growing uncertainty in the financial sector and fluctuations in foreign exchange rates. The contraction of economic activity in 2014 primarily resulted from a 6.8% decrease in gross investment, a 7.0% decrease in exports and a 3.3% decrease in total consumption.

Following GDP contraction in 2014, Argentina’s real GDP increased by 2.6% in 2015, reflecting a recovery in consumption, due to an improvement in the labor market and investment. Real GDP growth in 2015 was primarily driven by a 3.8% increase in gross investment, resulting from a 5.2% increase in total durable equipment of production and a 2.3% increase in construction, as well as a 4.0% increase in total consumption due to a 6.8% increase in public sector consumption and a 3.5% increase in private sector consumption.

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Principal Sectors of the Economy

The following tables set forth the composition of Argentina’s real GDP by economic sector for the periods specified.

Real GDP by Sector

(in millions of pesos, at constant 2004 prices)

	2011		2012		2013		2014		2015
Primary production:
Agriculture, livestock, fisheries and forestry	Ps.	51,198	Ps.	44,606	Ps.	49,726	Ps.	51,269	Ps.	55,177
Mining and extractives (including petroleum and gas)		23,636		23,350		22,405		22,755		23,403
Total primary production		74,834		67,957		72,131		74,024		78,580
Secondary production:
Manufacturing		132,857		128,986		130,926		124,309		125,253
Construction		22,928		22,369		22,346		21,895		22,547
Electricity, gas and water		11,142		11,662		11,718		11,949		12,362
Total secondary production		166,927		163,018		164,990		158,152		160,161
Services:
Transportation, storage and communications		52,203		52,515		53,754		54,168		55,581
Trade, hotels and restaurants		109,505		106,916		109,311		102,447		105,370
Financial, real estate, business and rental services		96,231		97,645		98,924		97,803		99,726
Public administration, education, health, social and personal services		89,845		92,882		94,638		96,264		99,100
Domestic services(1)		3,975		4,154		4,247		4,259		4,285
Total services		351,760		354,112		360,875		354,941		364,062
Plus import duties less adjustment for banking service(2)		117,261		118,400		122,412		115,189		118,095
Total real GDP	Ps.	710,782	Ps.	703,486	Ps.	720,407	Ps.	702,306	Ps.	720,898

(1) Includes services completed by domestic workers including caretakers, domestic servants and private chauffeurs.

(2) The production figures in this table do not include duties assessed on imports used in production, which must be taken into account for purposes of determining real GDP. Import duties for purposes of determining real GDP are recorded under this line item.

Source: INDEC and Ministry of the Treasury.

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Real GDP by Sector

(as a % of real GDP, at constant 2004 prices)

	2011			2012			2013			2014			2015
Primary production:
Agriculture, livestock, fisheries and forestry		7.2	%		6.3	%		6.9	%		7.3	%		7.7	%
Mining and extractives (including petroleum and gas)		3.3	%		3.2	%		3.1	%		3.2	%		3.2	%
Total primary production		10.5	%		9.7	%		10.0	%		10.5	%		10.9	%
Secondary production:
Manufacturing		18.7	%		18.3	%		18.2	%		17.7	%		17.4	%
Construction		3.2	%		3.2	%		3.1	%		3.1	%		3.1	%
Electricity, gas and water		1.6	%		1.7	%		1.6	%		1.7	%		1.7	%
Total secondary production		23.5	%		23.2	%		22.9	%		22.5	%		22.2	%
Services:
Transportation, storage and communication		7.3	%		7.5	%		7.5	%		7.7	%		7.7	%
Trade, hotels and restaurants		15.4	%		15.2	%		15.2	%		14.6	%		14.6	%
Financial, real estate, business and rental services		13.5	%		13.9	%		13.7	%		13.9	%		13.8	%
Public administration, education, health, social and personal services		12.6	%		13.2	%		13.1	%		13.7	%		13.7	%
Domestic services(1)		0.6	%		0.6	%		0.6	%		0.6	%		0.6	%
Total services		49.5	%		50.3	%		50.1	%		50.5	%		50.5	%
Plus import duties less adjustment for banking service(2)		16.5	%		16.8	%		17.0	%		16.4	%		16.4	%
Total real GDP		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

(1) Includes services completed by domestic workers including caretakers, domestic servants and private chauffeurs.

(2) The production figures in this table do not include duties assessed on imports used in production, which must be taken into account for purposes of determining real GDP. Import duties for purposes of determining real GDP are recorded under this line item.

Source: INDEC and Ministry of the Treasury.

In 2011, real GDP increased by 6.0%. Growth was primarily driven by the services sector, which increased by 6.4% and accounted for 49.5% of real GDP for 2011. Within the services sector, wholesale and retail trade and repairs experienced the highest growth. As compared to 2010, the primary production sector decreased by 3.5%, primarily as a result of a 5.8% decrease in mining and extractives, while the secondary production sector increased by 7.7%, primarily as a result of a 9.5% increase in construction.

In 2012, real GDP decreased by 1.0%. This contraction in economic activity was primarily due to the primary production sector, which decreased by 9.2% and accounted for 9.7% of real GDP for 2012, and the secondary production sector, which decreased by 2.3%, primarily as a result of a 2.9% decrease in manufacturing. As compared to 2011, the services sector increased by 0.7%, primarily driven by a 4.5% increase in domestic services.

In 2013, real GDP increased by 2.4%. Growth was primarily driven by the services sector, which increased by 1.9% and accounted for 50.1% of real GDP for 2013. Within the services sector, financial services experienced the highest growth. As compared to 2012, the primary production sector increased by 6.1%, primarily as a result of an increase in agriculture, livestock, fisheries and forestry, while the secondary production sector increased by 1.2%, primarily as a result of a 1.5% increase in manufacturing.

In 2014, real GDP decreased by 2.5%. This decline in real GDP was primarily driven by the services sector, which decreased by 1.6% and accounted for 50.5% of real GDP for 2014. Within the services sector, public

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administration services experienced the highest growth. As compared to 2013, the secondary production sector decreased by 4.1%, primarily as a result of a 5.1% decrease in manufacturing, while the primary production sector increased by 2.6%, primarily as a result of 3.1% growth in agriculture, livestock, fisheries and forestry.

In 2015, real GDP increased by 2.6%. Growth was primarily driven by the services sector, which increased by 2.6% and accounted for 50.5% of real GDP for 2015. Within the services sector, public administration experienced the highest rate of growth. As compared to 2014, the primary production sector increased by 6.2% and the secondary production sector increased by 1.3%.

The following table sets forth Argentina’s real GDP growth by sector for the periods specified.

Real GDP Growth by Sector

(% change from previous year, at constant 2004 prices)

	2011			2012			2013			2014			2015
Primary production:
Agriculture, livestock, fisheries and forestry		(2.4	)%		(12.9	)%		11.5	%		3.1	%		7.6	%
Mining and extractives (including petroleum and gas)		(5.8	)		(1.2	)		(4.0	)		1.6			2.8
Total primary production		(3.5	)		(9.2	)		6.1			2.6			6.2
Secondary production:
Manufacturing		7.7			(2.9	)		1.5			(5.1	)		0.8
Construction		9.5			(2.4	)		(0.1	)		(2.0	)		3.0
Electricity, gas and water		4.7			4.7			0.5			2.0			3.5
Total secondary production		7.7			(2.3	)		1.2			(4.1	)		1.3
Services:
Transportation, storage and communication		5.4			0.6			2.4			0.8			2.6
Trade, hotels and restaurants		10.1			(2.4	)		2.2			(6.3	)		2.9
Financial, real estate, business and rental services		5.8			1.5			1.3			(1.1	)		2.0
Public administration, education, health, social and personal services		3.8			3.4			1.9			1.7			2.9
Domestic services(1)		1.2			4.5			2.2			0.3			0.6
Total services		6.4			0.7			1.9			(1.6	)		2.6
Plus import duties less adjustment for banking service(2)		9.1			1.0			3.4			(5.9	)		2.5
Total real GDP		6.0	%		(1.0	)%		2.4	%		(2.5	)%		2.6	%

(1) Includes services completed by domestic workers including caretakers, domestic servants and private chauffeurs.

(2) The production figures in this table do not include duties assessed on imports used in production, which must be taken into account for purposes of determining real GDP. Import duties for purposes of determining real GDP are recorded under this line item.

Source: INDEC and Ministry of the Treasury.

Primary Production

In 2015, the total primary sector production increased to Ps. 78.6 billion, or 6.2%, from Ps. 74.0 billion in 2014. The fishing sector increased by 2.5%, from Ps. 2.18 billion in 2014 to Ps. 2.24 billion in 2015. The growth in primary sector production during the first half of 2015 was due to the expansion of the agricultural and livestock sector. The growth in the livestock sector was driven by an increase in domestic consumption and by better meat prices due to a decrease in international prices of agricultural products.

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The following tables set forth Argentina’s primary production and growth for the periods specified.

Primary Production (in millions of pesos, at constant 2004 prices)

	2011		2012		2013		2014		2015
Agriculture, livestock and game		48,135		41,439		46,058		47,565		51,429
Fishing		1,745		1,756		2,157		2,184		2,239
Forestry, logging and related services		1,318		1,412		1,511		1,520		1,509
Mining and extractives (including petroleum and gas)		23,636		23,350		22,405		22,755		23,403
Total sector production		74,834		67,957		72,131		74,024		78,580

Source: INDEC and Ministry of the Treasury.

Primary Production

(% change from previous year, at constant 2004 prices)

	2011			2012			2013			2014			2015
Agriculture, livestock and game		(2.8	)%		(13.9	)%		11.1	%		3.3	%		8.1	%
Fishing		5.2	%		0.6	%		22.9	%		1.2	%		2.5	%
Forestry, logging and related services		0.5	%		7.1	%		7.0	%		0.6	%		(0.7	)%
Mining and extractives (including petroleum and gas)		(5.8	)%		(1.2	)%		(4.0	)%		1.6	%		2.8	%
Total sector production		(3.5	)%		(9.2	)%		6.1	%		2.6	%		6.2	%

Source: INDEC and Ministry of the Treasury.

Agriculture, Livestock, Fisheries and Forestry

Argentina relies exclusively on its domestic supply for virtually all agricultural and livestock products, and is a major exporter of primary products, including cereals, grains, meat and fish. Crop production consists primarily of soy, corn and wheat. During the 2014 to 2015 season, soy, corn and wheat production represented 49.9%, 27.5% and 11.3% of total agricultural production, respectively. During 2015, Argentina’s agriculture, livestock, fisheries and forestry sector accounted for 7.7% of real GDP.

As of the date of this prospectus, the INDEC has not yet released revised segment-by-segment production and growth data for Argentina’s agriculture, livestock and hunting or forestry sectors for the years 2011-2015.

Mining and Extractives (Including Petroleum and Gas Production)

The mining and extractives sector consists primarily of precious and semi-precious metals, coal, petroleum and gas exploration and production. Historically, mining activity in Argentina has represented a small part of the economy, accounting for 3.2% of real GDP in 2015.

Argentina is the second largest producer of natural gas and the fourth largest producer of crude oil in Latin America, based on 2015 production, according to the 2016 edition of the BP Statistical Review of World Energy, published in June 2015. Since its expropriation of 51% of the shares of YPF, the Government has controlled YPF, which, as of December 31, 2015, held interests in 108 oil and gas fields in Argentina. YPF, in association with private partners, is also engaged in projects relating to the exploration and development of unconventional resources, including shale oil and gas, primarily in the Vaca Muerta formation located in the provinces of Neuquén and Río Negro. See “Role of the State in the Economy—Oil and Gas Industry,” “The Argentine Economy—Fernández de Kirchner’s Administration: 2008 2015,” “—Principal Government Policies and their Impact on Argentina’s Economy (2011-2015)” and “Macri Administration: 2015-Present.”

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Argentina’s oil and gas industry and the energy sector became the target of intense regulation during the Kirchner and Fernández de Kirchner administrations, including price controls, export restrictions and other measures that maintained local prices below international price levels. Those same policies, when international oil prices dropped, resulted in subsidies being paid to oil producers to support domestic prices. These measures are in the process of being dismantled by the Marci administration.

Secondary Production

Manufacturing

Argentina’s manufacturing sector primarily consists of the production of food and beverages, chemical products and substances, common metals, rubber and plastic products, motor vehicles, trailers and semi-trailers and apparel. The 2001-2002 economic crisis that severely affected Argentina—with GDP contracting 10.9% in 2002—had a significant adverse effect on this sector. The adoption of import-substitution policies commencing in 2002 contributed to the growth of this sector by 4.8% on average each year. Between 2003 and 2008, growth was also fueled by growth of manufactured products, which became competitive due to the effects of the devaluation of the peso and investments aimed at stimulating production. The manufacturing of industrial products, such as chemical products, planes and ships, and agricultural products, such as crops and livestock, also contributed to exports during this period. In 2015, the manufacturing sector accounted for 17.4% of real GDP.

During 2011, the manufacturing sector grew by 7.7% compared to 2010. This increase was primarily driven by:

• a 19.2% increase in machinery and equipment, accounting for 15.3% of the total growth in the manufacturing sector in 2011;

• a 4.9% increase in food and beverage production, accounting for 15.3% of the total growth in the manufacturing sector in 2011; and

• a 6.4% increase in the production of chemical products and substances, accounting for 10.4% of the total growth in the manufacturing sector in 2011.

During 2012, the manufacturing sector contracted by 2.9% compared to 2011. This decrease was primarily driven by:

• a 9.9% decrease in machinery and equipment, accounting for 23.1% of the total contraction in the manufacturing sector in 2012;

• an 8.2% decrease in the production of motor vehicles, trailers, and semi-trailers, accounting for 15.6% of the total contraction in the manufacturing sector in 2012; and

• a 5.7% decrease in common metals , accounting for 14.9% of the total contraction in the manufacturing sector in 2012.

This decrease was partially offset by a 4.4% increase in the chemical product and substance sector and a 20.3% increase in entertainment and communication equipment.

In 2013, the manufacturing sector grew by 1.5% compared to 2012. This increase was primarily driven by:

• a 5.2% increase in chemical products and substances, accounting for 45.7% of the total expansion in the manufacturing sector in 2013;

• an 8.4% increase in the production of motor vehicles, trailers, and semi-trailers, accounting for 29.5% of the total expansion in the manufacturing sector in 2013; and

• an 8.0% increase in non-metallic minerals, accounting for 22.2% of the total expansion in the manufacturing sector in 2013.

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This increase was partially offset by a 5.0% decrease in the metal products sector.

During 2014, the manufacturing sector contracted by 5.1% compared to 2013. This decrease was primarily driven by:

• a 20.6% decrease in the production of motor vehicles, trailers, and semi-trailers, accounting for 22.9% of the total contraction in the manufacturing sector in 2014;

• a 12.3% decrease in the production of machinery and equipment, accounting for 15.3% of the total expansion in the manufacturing sector in 2014; and

• a 13.6% decrease in metal products, accounting for 11.9% of the total expansion in the manufacturing sector in 2014.

During 2015, the manufacturing sector increased by 0.8% compared to 2014. This increase was primarily driven by a 3.5% increase in food and beverages, a 7.1% increase in rubber and plastic products and a 7.8% increase in furniture. This increase was partially offset by a 8.4% decrease in common metals production and an 11.8% decrease in motor vehicles, trailers, and semi-trailers.

Construction

There is a strong correlation between the evolution of real GDP and the construction sector, which primarily consists of residential projects. The construction sector accounted for 3.1% of real GDP in 2015.

In 2011, the construction sector grew by 9.5% compared to 2010, fueled by public sector investment in infrastructure projects and road construction, as well as private sector investment in residential housing and construction for commercial and industrial purposes. During 2011, the construction sector accounted for 3.2% of real GDP.

In 2012, the level of activity in the construction sector decreased by 2.4% compared to 2011, primarily due to a deceleration of overall economic activity. During 2012, the construction sector accounted for 3.2% of real GDP. Investment in construction in the hydrocarbons sector decreased in 2012, while construction activity in all other public and private sectors increased.

In 2013, the level of activity in the construction sector decreased by 0.1% compared to 2012. In 2013, the construction sector accounted for 3.1% of real GDP.

In 2014, the level of activity in the construction sector decreased by 2.0% compared to 2013, primarily due to unemployment in both the private and public sectors. In 2014, the construction sector accounted for 3.1% of real GDP.

In 2015, the level of activity in the construction sector increased by 3.0% compared to 2014, primarily due to an increase in private sector projects, which was partially offset by a decrease in public sector projects and construction activity in the hydrocarbons sector.

Electricity, Gas and Water

Electricity in Argentina is primarily produced from combined cycle (which uses both gas and steam turbines to produce electricity) and hydroelectric sources, with supplemental generation from gas, coal and nuclear plants. The electricity, gas and water sector represents a small fraction of the Argentine economy, accounting for 1.7% of real GDP in 2015.

Although electricity production in Argentina experienced positive growth between 2011 and 2014, the rates of growth decelerated during this period. Electricity production increased by 6.9%, 3.8%, 3.2%, 1.1% and 4.3%

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in 2011, 2012, 2013, 2014 and 2015, respectively, in each case as compared to the previous year. During this period, Argentina relied in part on fuel imports to meet excess consumption needs. The following table sets forth information on Argentina’s electricity sector for the periods specified.

Principal Economic Indicators of the Electricity Sector

(in GW/hr, unless otherwise specified)

	2011		2012		2013		2014		2015
Production of electricity sector
Combined cycle		44,967		51,838		51,661		51,032		52,576
Hydroelectric		39,339		36,626		40,330		40,663		41,464
Other(1)		36,926		37,340		37,829		39,510		42,830
Imports(2)		2,412		423		342		1,390		1,655
Total generation		121,232		125,804		129,820		131,205		136,870
Consumption by economic sector
Industrial		35,918		36,611		38,141		38,025		41,025
Residential		35,080		36,464		38,821		40,387		42,079
Commercial		18,434		18,777		18,854		19,494		21,565
Others		9,492		10,705		9,749		9,936		10,501
Government		3,183		3,420		3,844		4,004		4,164
Total consumption		102,106		105,978		109,409		111,845		119,334

(1) Includes diesel, wind, nuclear, gas, steam and solar energy.

(2) Imports, primarily from Uruguay, to meet domestic demand in excess of domestic production.

n.a. = not available.

Source: INDEC and Ministry of the Treasury.

In December 2015, President Macri declared a state of emergency with respect to the national electrical system that is expected to remain in effect until December 31, 2017. The state of emergency will allow the Government to take actions designed to guarantee the supply of electricity to the country such as instructing the Ministry of Energy and Mining to design and implement, with the cooperation of all federal public entities, a coordinated program to guarantee the quality and security of the electricity system. In addition, the Macri administration announced the elimination of some energy subsidies currently in effect and a substantial increase in electricity rates. For more information, see ““—Economic History and Background—Macri Administration: 2015-Present” and “—Role of the State in the Economy—Oil and Gas Industry.”

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The following table sets forth the imports and exports of fuel and energy for the periods specified.

Exports and Imports of Fuel and Energy

	2011			2012			2013			2014			2015
Total FOB exports (in millions of U.S. dollars)	U.S.$	82,981		U.S.$	79,982		U.S.$	75,963		U.S.$	68,407		U.S.$	56,788
Fuel and energy (in millions of U.S. dollars)		6,682			6,978			5,562			4,950			2,252
As a % of total FOB exports		8.1	%		8.7	%		7.3	%		7.2	%		4.0	%
Change from previous year		21.7	%		(3.6	)%		(5.0	)%		(9.9	)%		(17.0	)%
Total CIF imports (in millions of U.S. dollars)	U.S.$	73,961		U.S.$	67,974		U.S.$	74,442		U.S.$	65,230		U.S.$	59,757
Fuel and energy (in millions of U.S. dollars)		9,796			9,128			12,464			11,455			6,842
As a % of total CIF imports		13.2	%		13.4	%		16.7	%		17.6	%		11.4	%
Change from previous year		30.2	%		(8.1	)%		9.5	%		(12.4	)%		(8.4	)%
Net (imports) exports of fuel and energy (in millions of U.S. dollars)	U.S.$	(3,115	)	U.S.$	(2,150	)	U.S.$	(6,902	)	U.S.$	(6,505	)	U.S.$	(4,590	)

Source: INDEC and Ministry of the Treasury.

Evolution of Exports and Imports of Fuel and Energy

(% change in volume from previous year)

	2011			2012			2013			2014			2015
Change in volume of exports		2.3	%		(5.9	)%		(3.7	)%		(7.9	)%		(1.5	)%
Change in volume of imports		21.3	%		(6.3	)%		3.7	%		(12.5	)%		3.8	%

Source: INDEC and Ministry of the Treasury.

Services

The services sector represents the largest portion of the Argentine economy, accounting for 49.5% of real GDP in 2011, 50.3% in 2012, 50.1% in 2013, 50.5% in 2014 and 50.5% in 2015.

The following tables set forth the composition and growth of the services sector for the periods specified.

Composition of Services Sector

(in millions of pesos, at constant 2004 prices)

	2011		2012		2013		2014		2015
Wholesale and retail trade and repairs		98,684		95,946		98,339		91,605		94,337
Transportation, storage and communication services		52,203		52,515		53,754		54,168		55,581
Real estate, business and rental services		71,232		70,809		71,328		70,964		72,546
Education, Social and health services		42,808		44,663		45,905		46,957		48,383
Financial services		25,000		26,836		27,596		26,839		27,181
Other community, social and personal services		18,548		18,874		18,611		18,253		18,597
Public administration		28,489		29,346		30,121		31,055		32,120
Hotels and restaurants		10,821		10,970		10,972		10,842		11,033
Domestic Services(1)		3,975		4,154		4,247		4,259		4,285
Total		351,760		354,112		360,875		354,941		364,062

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(1) Includes services completed by domestics workers including caretakers, domestic servants and private chauffeurs.

Source: INDEC and Ministry of the Treasury.

Growth of Services Sector

(% change from prior year, at constant 2004 prices)

	2011			2012			2013			2014			2015
Wholesale and retail trade and repairs		10.7	%		(2.8	)%		2.5	%		(6.8	)%		3.0	%
Transportation, storage and communication services		5.4	%		0.6	%		2.4	%		0.8	%		2.6	%
Real estate, business and rental services		4.4	%		(0.6	)%		0.7	%		(0.5	)%		2.2	%
Education, Social and health services		4.1	%		4.3	%		2.8	%		2.3	%		3.0	%
Financial services		9.8	%		7.3	%		2.8	%		(2.7	)%		1.3	%
Other community, social and personal services		4.0	%		1.8	%		(1.4	)%		(1.9	)%		1.9	%
Public administration		3.2	%		3.0	%		2.6	%		3.1	%		3.4	%
Hotels and restaurants		5.1	%		1.4	%		0.0	%		(1.2	)%		1.8	%
Domestic services(1)		1.2	%		4.5	%		2.2	%		0.3	%		0.6	%
Total		6.4	%		0.7	%		1.9	%		(1.6	)%		2.6	%

(1) Includes services completed by domestics workers including caretakers, domestic servants and private chauffeurs.

Source: INDEC and Ministry of the Treasury.

Between 2011 and 2015, the services sector grew by 3.5%. This increase was primarily driven by growth in education and social and health services, which increased by 13.0%, public administration, which increased by 12.7%, and transportation, storage and communication services, which increased by 6.5% during this period.

In 2011, the services sector grew by 6.4% compared to 2010. This increase was primarily driven by growth in wholesale and retail trade and repairs, real estate, business, rental services and transportation, storage and communication services, including an increase in telecommunications stemming from the development of mobile technologies.

During 2012, the services sector grew at a decelerated rate of 0.7%, primarily due to a decline in wholesale and retail trade and repairs. In 2012, the services sector was the only sector that contributed positively to GDP growth, increasing as a percent of GDP from 49.5% in 2011 to 50.3% in 2012.

In 2013, the services sector grew by 1.9%. This increase resulted from growth in each sub-sector other than community, social and personal services and hotels and restaurants, with particular growth in education and social and health services, public administration and wholesale and retail trade and repairs.

In 2014, the services sector decreased by 1.6% compared to 2013. This decrease was primarily driven by the contraction of wholesale and retail trade and repairs.

In 2015, the services sector grew by 2.6% compared to 2014. This growth was primarily driven by the increase in wholesale and retail trade and repairs and real estate, business and rental services.

Telecommunications

The telecommunications sector has grown in terms of the total number of lines each year since 2001. Much of this growth has resulted from a substantial increase in the use of mobile communications, which have become increasingly common in Argentina as more affordable cellular phone plans have become available and

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consumers’ purchasing power has improved. The number of fixed wire lines has increased by 21.2% since 2001, while public phone lines fell by 44.3%. Between 2011 and 2015, the number of cellular phone lines continued to increase, although at lower rates than in previous years.

The table below reflects certain information regarding the telecommunications sector.

Summary of Telecommunications Sector

(in thousands of lines)

	2011		2012		2013		2014		2015(1)
Lines:(2)
Fixed wire(3)		9,631		9,664		9,787		9,854		9,881
Cellular(4)		57,854		58,308		60,086		61,527		63,219
Public phones		141		115		92		89		88
Total lines		67,626		68,088		69,965		71,471		73,188

(1) Average for January-October 2015.

(2) Annual average for each year indicated.

(3) Lines in service.

(4) Telephones in service.

Source: Ministry of Federal Planning, Public Investment and Services.

In October 2009, the Argentine Congress passed the Audiovisual Communication Services Law No. 26.522 (the “LSCA”) to replace the general legal framework under which the audiovisual media industry had operated in Argentina for approximately three decades. This law, which imposed restrictions on the ownership of licenses, was challenged by private companies operating in the audiovisual media industry on several grounds, including its encroachment on constitutional rights. On October 29, 2013, the Supreme Court of Argentina upheld the constitutionality of the LSCA.

On December 16, 2014, Congress passed Law No. 27,078 (the “Digital Argentina Act”), which partially repealed the existing National Telecommunications Law No. 19,798 and conditioned the effectiveness of Decree No. 764/00 (which had deregulated the telecommunications market) on certain new regulations. The most significant change to the former National Telecommunications system was the creation of a new public service referred to as “Public and Strategic Infrastructure Use and Access Service for and among Providers.” By characterizing this activity as a public service, providers (including audiovisual communication service providers) could be required to grant other “Information and Communication Technologies” (or “TIC,” the term used to refer to telecommunication services under the Digital Argentina Act) service providers access to network elements, related resources or services for such other TIC service providers to render their own services. Networks and infrastructure owners could be required to grant network access to competitors that had not made investments in their own infrastructure.

Until December 2015, the Argentine media industry was governed by the LSCA and the Digital Argentina Act, and subject to the oversight of two different enforcement agencies: (a) in the case of the audiovisual media industry, by the LSCA and its federal enforcement authority (the “AFSCA”), and (b) in the case of the telecommunications industry, by the Digital Argentina Act and its federal enforcement authority (the “AFTIC”).

On December 29, 2015, the Macri administration issued Decree No. 267/2015 (the “New Media Decree”) pursuant to which it intends, among other measures, to gradually converge the audiovisual media and telecommunications industries under the same regulatory framework. Among other things, the New Media Decree (i) creates a new National Communications Agency (“Enacom”), a self-governing decentralized entity under the Ministry of Communications, which replaces AFSCA and AFTIC as the authorities empowered to

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enforce the LSCA and the Digital Argentina Act; (ii) repeals and amends several provisions of the LSCA, including mandatory divestment requirements; and (iii) eliminates the restriction on providers offering open broadcasting television services and subscription television services in the same area.

Employment and Labor

Unemployment and Underemployment

The INDEC prepares a series of indices used to measure the social, demographic and economic characteristics of the Argentine population based on data generally collected in the Permanent Household Survey (Encuesta Permanente de Hogares, or “EPH”). Please see “Presentation of Statistical and Other Information—Certain Methodologies” for important information regarding the reliability of INDEC data.

The following table sets forth employment figures for the periods indicated.

Employment and Unemployment Rates⁽¹⁾

	Fourth quarter of(*)						Third quarter of
	2013			2014			2015			2016
Greater Buenos Aires Area:
Labor force rate(2)		47.3	%		46.5	%		46.1	%		48.0	%
Employment rate(3)		44.3			43.2			43.4			43.2
Unemployment rate(4)		6.5			7.2			6.0			10.0
Underemployment rate(5)		8.1			10.0			9.7			11.5
Major interior cities:(1)
Labor force rate(2)		43.8			43.9			43.4			43.7
Employment rate(3)		41.1			41.0			40.9			40.8
Unemployment rate(4)		6.3			6.6			5.7			6.6
Underemployment rate(5)		7.4			8.0			7.5			8.5
Total urban:
Labor force rate(2)		45.6			45.2			44.8			46.0
Employment rate(3)		42.7			42.1			42.2			42.1
Unemployment rate(4)		6.4			6.9			5.9			8.5
Underemployment rate(5)		7.8	%		9.1	%		8.6	%		10.2	%

(1) Figures are based on 28 major cities. The current methodology to measure EPH is applied to every major city except Rawson - Trelew, San Nicolás -Villa Constitución and Viedma - Carmen de Patagones, which are still being measured using the old methodology given the resource constraints of cities located in the interior of the country.

(2) The labor force consists of the sum of the population that has worked a minimum of (i) one hour with remuneration, or (ii) 15 hours without remuneration during the week preceding the date of measurement plus the population that is unemployed but actively seeking employment.

(3) To be considered employed, a person above the minimum age requirement must have worked at least one hour with remuneration or 15 hours without remuneration during the preceding week.

(4) Unemployed population as a percentage of the labor force. The unemployed population does not include the underemployed population.

(5) Underemployed population as a percentage of the labor force. Workers are considered underemployed if they work fewer than 35 hours per week and wish to work more.

(*) Data for the fourth quarter of 2015 and 2016 are not available.

Source: INDEC and Ministry of the Treasury.

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In January 2002, the Government implemented the Plan Jefes y Jefas de Hogar (Heads of Households Program). Under the Heads of Households Program, unemployed heads of households with one or more children under the age of 18 or with disabled dependents of any age receive Ps. 150 per month (an amount that has periodically been adjusted for inflation) in exchange for at least four hours of either community service or participation in other public works projects. Persons receiving benefits under the Heads of Households program are considered employed in the Government’s employment statistics, including in the tables presented in this section “Employment and Labor.” During the height of the economic crisis in the first three months of 2002, there were approximately 1.4 million beneficiaries in this program. As unemployment decreased and new programs were created to address other employment related matters such as adequate job training, the number of beneficiaries declined.

The Informal Economy

Argentina has an informal economy composed primarily of employees not registered with Argentina’s social security system but working in legitimate businesses and, to a lesser degree, in unregistered businesses. Because of its nature, the informal economy is difficult to track through statistical information or other reliable data.

A second and more modest segment of Argentina’s informal sector consists of economic activities that take place outside the formal economy or deviate from official norms for economic transactions. These include small businesses, usually those owned by individuals and families, which produce and exchange legal goods and services but may not have the appropriate business permits, report their tax liability, comply with labor regulations or have legal guarantees in place for suppliers and end users. As of the third quarter of 2015, the INDEC estimates that the informal economy decreased to 33.1% of the total labor force compared to 34.2% as of the third quarter of 2011.

The following table provides the estimated percentage of workers in Argentina’s formal and informal economies for the periods specified.

Formal and Informal Economies⁽¹⁾

(as a percentage of total)

	2011			2012			2013			2014			2015
Formal		65.8	%		65.4	%		66.5	%		65.7	%		66.9	%
Informal		34.2			34.6			33.5			34.3			33.1
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

(1) Figures presented here do not include participants in the Heads of Households Program and individuals under the age of 18.

Source: INDEC and Ministry of the Treasury.

Composition of Employment

During the first half of 2015, the total number of jobs in the secondary sector decreased by 0.2 percentage points compared to the first half of 2014. In the services sector, the total number of jobs increased by 0.1 percentage points during the first half of 2015 compared to the first half of 2014. Approximately half of this increase was due to the public administration sector. As of June 30, 2015, the services sector employed the majority of the Argentine labor force (approximately 73.6%), followed by the secondary production sector (representing approximately 21% of the labor force) and the primary production sector (representing approximately 5.3% of the labor force).

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The following table sets forth employment figures by sector for the periods specified.

Employment

(% by sector) ⁽¹⁾

As of December 31,		As of June 30,
2011	2012