Exercise

Comparative analysis
Part 2
Name: Ana Gabriela Hernandez
According to the instructions given for the professor the first step it is to establish
two countries to compare their economy and statics as macroeconomic data.

Government Expenditures
Government expenditures
Year Argentina Honduras
2002 26.008.200.000 € 2.205.900.000 €
2003 27.741.100.000 € 1.903.200.000 €
2004 30.545.500.000 € 1.802.200.000 €
2005 39.102.100.000 € 1.834.500.000 €
2006 49.366.800.000 € 2.106.300.000 €
2007 62.074.900.000 € 2.189.500.000 €
2008 76.047.500.000 € 2.476.400.000 €
2009 82.920.400.000 € 2.947.800.000 €
2010 106.784.400.000 € 3.137.400.000 €
2011 132.324.900.000 € 3.286.000.000 €
2012 166.024.300.000 € 3.798.600.000 €
2013 179.123.000.000 € 4.119.500.000 €
2014 164.790.400.000 € 4.109.100.000 €
2015 239.507.800.000 € 4.920.000.000 €
2016 208.914.000.000 € 5.374.100.000 €
2017 234.454.100.000 € 5.502.600.000 €
2018 171.022.900.000 € 5.337.400.000 €

Goverment expeditures
300.000.000.000 €

250.000.000.000 €

200.000.000.000 €

150.000.000.000 €

100.000.000.000 €

50.000.000.000 €

-€
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Argentina Honduras
 Argentina
300.000.000.000 €
250.000.000.000 €
200.000.000.000 €
150.000.000.000 €
100.000.000.000 €
50.000.000.000 €
-€
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Honduras
6.000.000.000 €

5.000.000.000 €

4.000.000.000 €

3.000.000.000 €

2.000.000.000 €

1.000.000.000 €

-€
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Government expenditures in these two Latin American countries are

divided into 3 of the most important areas that require attention by the central
government. Education, Health and Defense are the areas that have most of the
expenses allocated and have differed considerably in the years of study and
obviously depend on the economic and social development of the country.
In education, both countries show a growth of approximately 3-4
percentage points; In the case of Argentina, in 2002 the government designated
13% of the expenses for education, while in 2018 16% of the country's expenses
were planned. In Honduras, despite being a smaller country with less population,
in 2002 19% of government expenditures were designated and for 2018 this
percentage rose to 21%.
 Education expenses - ARGENTINA
18,00%

16,00%

14,00%

12,00%

10,00%

8,00%

6,00%

4,00%

2,00%

0,00%
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Education expenses - HONDURAS

0,3

0,25

0,2

0,15

0,1

0,05

0
20022003200420052006200720082009201020112012201320142015201620172018

With the health area Argentina designated in 2002 13% in this year an
increase is observed due to the economic collapse that arose due to the coup
d'état of the government, for the year 2018 an 18% of the spending designated
to the health area was programmed. While in Honduras in 2002 it started with 9%
designated to health and in 2018 with 15%.
For the year 2002, much more economic support is designated to the
health area due to the dengue outbreak that arises in the north of the country;
and even without being able to recover the losses of 2002 for the year 2005, a
large number of patients with sexually transmitted diseases arise. For 2011, the
government decides to make changes in the health area to lower the mortality
rate in newborns, for which it makes considerable changes in the neonatal areas
of the most important hospitals in the country.

Health expenses
20,00%
18,00%
16,00%
14,00%
12,00%
10,00%
8,00%
6,00%
4,00%
2,00%
0,00%
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Health expenses Argentina Health expenses Honduras

Regarding the defense area, it is observed contrary to the above that the
government of Argentina designated 4% in 2002 and for the year 2018 only 1%.
During the political crisis due to the coup d'état that occurred in 2002, the
government decided to make a large investment, which consequently lowered
the designated percentage for the following years. While the Honduran
government presented a total payroll of 2% in 2002 and 7% for 2018. The
increase in this area is due to the constant fight that the government has taken
on with organized crime and all political and social crises that affect security. For
2015, the central government created a new police department, which raised
almost 2% of spending in the defense area.

Defense expenses
7,00%

6,00%

5,00%

4,00%

3,00%

2,00%

1,00%

0,00%
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Defense expenses Argentina Defense expenses Honduras

 Level of deficit budget
Deficit budget
Year Argentina Honduras
2002 - 2.277.000.000 € - 413.000.000 €
2003 1.889.000.000 € - 367.000.000 €
2004 5.262.000.000 € - 175.000.000 €
2005 5.348.000.000 € - 3.000.000 €
2006 3.060.000.000 € - 117.000.000 €
2007 1.590.000.000 € - 23.000.000 €
2008 870.000.000 € - 25.000.000 €
2009 - 4.395.000.000 € - 506.000.000 €
2010 - 4.461.000.000 € - 400.000.000 €
2011 - 10.410.000.000 € - 373.000.000 €
2012 - 13.608.000.000 € - 502.000.000 €
2013 - 14.981.000.000 € - 798.000.000 €
2014 - 18.036.000.000 € - 431.000.000 €
2015 - 34.743.000.000 € - 148.000.000 €
2016 - 33.482.000.000 € - 78.000.000 €
2017 - 38.162.000.000 € - 84.000.000 €
2018 - 22.972.000.000 € 40.000.000 €

Deficit budget
10.000.000.000 €

5.000.000.000 €

-€

-5.000.000.000 €

-10.000.000.000 €

-15.000.000.000 €

-20.000.000.000 €

-25.000.000.000 €

-30.000.000.000 €

-35.000.000.000 €

-40.000.000.000 €

-45.000.000.000 €

Deficit budegt Argentina Deficit budegt Honduras

From 2002 to 2008, Argentina demonstrated budget planning that met all
the needs of the country and still had its deficit under control. Starting in 2009
and due to the well-known "The Great Recession", problems began in the South
American country. Due to this, there were major failures in the economic
regulation of all Latin American countries and, consequently, the debt and deficit
of the countries rose relative to each other's GDP. In 2011 and with the crisis that
Argentina had been carrying since 2009, its economic system collapsed with the
currency war and the value of its national currency under many points against the
dollar.
For 2014, the Argentine government tried to solve its economic problems
and decided to try to normalize without much success, since this year there was
a drop in the consumption and export of national products, which has
repercussions in 2015 as one of the most difficult years for the country. For the
year 2016, it was decided to carry out a recession and for the year 2017, better
results were expected for the economic sector, which resulted in more work for
the population and general growth in all sectors of the country.

Argentina
10.000.000.000 €

5.000.000.000 €

-€
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
-5.000.000.000 €

-10.000.000.000 €

-15.000.000.000 €

-20.000.000.000 €

-25.000.000.000 €

-30.000.000.000 €

-35.000.000.000 €

-40.000.000.000 €

-45.000.000.000 €

Honduras did not see an economic respite until 2005 when it finally signed
the free trade agreement with the United States, Central American countries and
the Dominican Republic; this allowed the inflation and unemployment rate to
decrease in the country. The budget deficit remained at the same levels during
these years and the economy was stable until 2009 when the country underwent
a coup that left the economy and society broken. With the rumors of a civil war
and a serious political crisis, the budget deficit rose from -0.27% of GDP to -506%
of GDP, which represented a real crisis for the following years in the country.
However, in 2012 and with some fiscal reforms and after the country
positioned itself as the largest coffee producer in North and Central America,
better results were expected, unfortunately this only worked for a few months
because at the end of this year and early 2013 Due to not concluding an
agreement with the international monetary fund, which prevented access to 160
million dollars for social works and budget support, and the political debt of
Honduras grows, leaving the country with a bad forecast for 2014.
In 2017, a better picture was presented for the Central American country,
since the growth of remittances, tourism and exports (Coffee, African palm) and
was evidently represented in the country's economic sector.

Honduras
100.000.000 €
-€
-100.000.000 € 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

-200.000.000 €
-300.000.000 €
-400.000.000 €
-500.000.000 €
-600.000.000 €
-700.000.000 €
-800.000.000 €
-900.000.000 €
 Public debt
Public debt
Year Argentina Honduras
2002 175.192.000.000 € 5.287.000.000 €
2003 157.639.000.000 € 4.877.000.000 €
2004 156.348.000.000 € 4.297.000.000 €
2005 128.521.000.000 € 4.321.000.000 €
2006 131.301.000.000 € 3.385.000.000 €
2007 130.518.000.000 € 2.151.000.000 €
2008 133.033.000.000 € 2.093.000.000 €
2009 133.052.000.000 € 2.527.000.000 €
2010 139.104.000.000 € 2.792.000.000 €
2011 147.615.000.000 € 3.201.000.000 €
2012 182.322.000.000 € 4.289.000.000 €
2013 200.255.000.000 € 5.250.000.000 €
2014 189.577.000.000 € 5.581.000.000 €
2015 304.333.000.000 € 7.078.000.000 €
2016 266.967.000.000 € 7.539.000.000 €
2017 325.144.000.000 € 8.026.000.000 €
2018 378.385.000.000 € 8.091.000.000 €

Public Debt
400.000.000.000 €
350.000.000.000 €
300.000.000.000 €
250.000.000.000 €
200.000.000.000 €
150.000.000.000 €
100.000.000.000 €
50.000.000.000 €
-€

Public debt Argentina Public debt Honduras

If there is a characteristic among all Latin American countries, it is that they

all have a debt with the United States and the international monetary fund. For
the year 2002, Argentina has a debt of almost 200 billion Euros, which by the end
of 2003 and under the government's mandate, almost 178 billion dollars were
paid to the international monetary fund, which reduced the debt by 73%. With
this, the government managed to stabilize the country's situation in terms of public
debt a little, however, for the years 2014-2015, the debt rose considerably due to
the payment of compensation for the nationalization of Argentina.
 Honduras is a totally opposite case, its public debt has risen considerably
during the period of 2002-2018, and there has been little economic relief that the
Central American country has had, as it depends exponentially on the great
America (USA). Despite the efforts made by the government, there have been
tough times, for example in the period of 2009-2018, the doubt increased 200%
and the GDP only 63%, for this reason it is almost impossible for the country to
fully recover. Since 2012 the Honduran currency (lempira) has been constantly
devalued. In this same period of time, there has been a collapse in commodity
prices (raw materials, agriculture, minerals, precious metals and oil) in the
Caribbean country.
Since 2010, and due to the migration of Honduran citizens to the United
States, the public debt has been more constant since remittances and
contributions from Hondurans residing in the United States have managed to
somewhat stabilize the situation in the country.
It is important to mention that both countries Honduras and Argentina
suffer great economic problems due to the devaluation of their currency
compared to the US dollar.