In the run-up to the board meeting to define the disbursement of US$4.7 billion, the IMF modified its forecasts for Argentina. According to the update of its global economic projections report, the organization expects that inflation will rise in the short term and that the economy will show a fall of 2.8% in 2024.
The estimate worsened 0.3 percentage points compared to the figure that the entity had projected in October, before the presidential elections took place.
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According to the World Economic Outlook (WEO) report, global inflation will slow down in both 2024 and 2025. However, they estimate that Argentina will go against the rest and inflation levels will continue. on the rise.
“The realignment of relative prices and the elimination of old price controls, the latest currency depreciation and its pass-through to prices are expected to raise inflation in the short term,” the report noted.
Likewise, the survey projects that world economic growth will be 1.9% in 2024, a decrease of 0.4 percentage points compared to the October WEO; while by 2025 they consider that it may increase up to 2.5%.
Finally, the multilateral credit entity also referred to fiscal policy: “In 2024, fiscal guidance is expected to tighten in several advanced and emerging market and developing economies, with the aim of rebuilding room for maneuver.” budget and contain the upward path of debt; Furthermore, this displacement is expected to slow growth in the short term.”
What the IMF said about Argentine economic activity
Regarding economic activity, the IMF worsened the projection and estimated that the Argentine economy will suffer a fall of 2.8% in 2024, 0.3 percentage points less growth compared to the previous report. “It is due to negative growth in Argentina in the context of a significant adjustment of economic policy to restore macroeconomic stability,” the report explained.
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In turn, he indicated that the economy would show an improvement in 2025 and the gross domestic product would increase by 5%. This value increased in percentage terms in relation to the calculation published in October of last year.
IMF projections for Latin America
Like the forecast for the Argentine economy, the organization led by Kristalina Georgieva worsened its outlook for the Latin American economy. According to the document, the region will grow 1.9% in 2023, which means a decrease of 0.4 points compared to the October report. “The revision of the forecast for 2024 is due to Argentina's negative growth in the context of a significant adjustment of economic policy to restore macroeconomic stability,” the IMF indicated.
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Regarding the performance of other important economies in the region during this year, the report stated that there will be improvements of 0.2 percentage points for Brazil and 0.6 percentage points for Mexico, mainly due to the carryover effects of domestic demand. stronger than expected and greater than expected growth in the main trading partners.
In any case, the organization estimated that the region's economy will improve in 2025 and show an increase of 2.5%.