Tuesday, January 31, 2023 | 3:23 p.m.
The International Monetary Fund (IMF) maintained its projection for Argentina and maintained that this year its economy will grow 2%, a level that would allow it to achieve an increase in its Gross Domestic Product (GDP) for the third consecutive year, and that would place it above the average for developed countries and the region.
In its January update to its World Economic Outlook (WEO), released Monday, the IMF estimated that the country will grow 2% both this year and in 2024, unchanged from its previous October forecast.
In this way, Argentina will accumulate three consecutive years of growth in its GDP after expanding 10.4% in 2021 and reaching 5.9% until November 2022, explains Télam.
If the projections are met, it will be the first time that the country has achieved this since 2008, at which time it had accumulated six consecutive years of expansion of between 8% and 9% per year after the 2002 collapse.
After 2008, the country only managed to chain two consecutive years of growth in 2010 and 2011, and from 2012 to 2020, it only grew in three periods (2013, 2015 and 2017).
The chief economist, Pierre-Olivier Gourinchas highlighted in a press conference the development of the country’s economy during the past year, exceeding what was originally forecast by the Fund itself.
on the rise
“We had an upward revision of Argentina last year, from almost 0.5 percentage points to 4.5%, based on stronger-than-expected activity in manufacturing and retail trade,” he said, referring to the data. of 2022 that the IMF originally estimated.
Regarding the estimate for this year, the Fund foresees a slowdown compared to 2022, in line with the rest of the global economy.
“It is a combination of both external forces such as the slowdown of the global economy that will also weigh on Argentina, and the adjustment policies that are being carried out in the country, both an adjustment in monetary policy and some adjustment in the plane fiscal to try to control a very high inflation that is close to 100%”, explained Gourinchas according to what was published by Télam.
The official stressed the importance of the country meeting the goals set forth in the IMF agreement, including a monetary financing limit of 0.6%, a fiscal deficit of 1.9% (compared to 2.5% in 2022) , and net international reserves of US$9.8 billion.
“We believe that it is really important to meet the policy goals that are set in the context of the program that the country has with the IMF, both fiscally and monetaryally,” the economist remarked.
higher growth
The expected growth of Argentina in 2023 is higher than that estimated for the advanced economies as a whole and that of the region.
In the case of developed countries, a growth of 1.2% is projected compared to 2.7% in 2022, with 90% of these countries with lower projections than last year.
Under the effect of the monetary adjustments of the Federal Reserve (FED) and the European Central Bank, the IMF estimates that the United States will grow 1.4% and the Eurozone 0.7%, in both cases with upward revisions – compared to October – of 0.4 and 0.2 percentage points.
Japan, on the contrary, with an expansive policy, will grow 0.8%, while the United Kingdom will be the only one of the large economies with an estimated contraction of 0.6%.
Regarding Latin America and the Caribbean, growth will slow down from 3.9% in 2022 to 1.8% for this year, although more than the 1.3% forecast by the World Bank and Celac.
The expansion would then accelerate to 2.1% in 2024 due to “tighter financial conditions and lower prices for exported commodities.”
Brazil and Mexico have projections of 1.2% and 1.7%, respectively, in both cases with upward revisions due to robust domestic demand and growth of trading partners in the Mexican case, and greater fiscal assistance than expected in the brazilian.
At the global level, the report projects a slowdown in growth from 3.4% in 2022 to 2.9% in 2023, below the historical average between 2000 and 2019 of 3.8%.
The recent reopening of China -which together with India will represent 50% of what the world will grow this year- and the moderation of the downside risks in the economies, allowed the Fund to increase the forecast for this year by 0.2 percentage points. year compared to the previous report, observing a “less gloomy” scenario and more resilient economies than expected in the last quarter of 2022.
“The forecast of low growth in 2023 reflects the rise in rates by central banks to fight inflation – especially in advanced economies – and the war in Ukraine,” the report said.
In the case of inflation, 84% of countries would have a lower rate this year compared to 2022, with the global average falling from 8.8% per year to 6.6%, although still above the pre-pandemic average of 3, 5%.
