2024-01-30 14:55:00
He International Monetary Fund dio a 180° turn in his perspective for the Argentine economy facing 2024. While, last October, in the run-up to the elections that proclaimed Javier Milei as President of the Nation, he had stated that the country’s Gross Domestic Product would increase by 2, 8%, now estimated a drop of the same number, which symbolizes a negative variation of 5.6%.
This last information emerged from the report “World Economic Outlook Update”released this Tuesday in Washington, United States. Argentina, in fact, is mentioned as the main cause of the 0.1% decline in growth estimates for Latin America and the Caribbeanwhich went from 2% to 1.9%.
The Government announced measures for SMEs: it opened access to dollars and made tax relief official
“The forecast review for 2024 reflects negative growth in Argentina in the context of a major policy adjustment to restore macroeconomic stability,” the agency said in the document. This was substantiated, in a press conference, by Pierre-Olivier GourinchasChief Economist of the IMF and author of the document.
In dialogue with the international press, he also Economic Advisor and Director of the Studies Departmentassured that this occurs in the midst of “an attempt by the new administration” of Freedom Advances to confront what, he considers, were the “deteriorated initial conditions” which he inherited from the management of Alberto Fernández, with Sergio Massa in the Ministry of Economy.
In this sense, he maintained that “inflation will grow significantly” while the Government “works to develop a very strong fiscal consolidation, with a fiscal surplus by 2024”something that Luis Caputo revealed in the announcement of the agreement for the seventh review of the program related to the payment of the loan contracted in 2018 by Mauricio Macri. “This is something we consider absolutely necessary”added the official of the entity, led by Kristalina Georgieva.
It is worth remembering that the head of the Treasury Palace assured that the great objective of the Executive this year is to achieve a primary surplus target of 2% of GDP following he financial deficit 6.1% registered in 2023, product of the sum of a primary deficit of 2.9% y debt service interest (3.2%).
Regarding the price increase, Gourinchas argued that it will be boosted in the short term, mainly in the first half of this year. However, he assured that he hopes that the Consumer’s price indexwhich is published by INDEC every month, will drop to single digits by June, while “fiscal consolidation begins to gain strength”, and the trend will deepen by the end of 2024, reaching 150% annually, below 211.4 % registered in all of 2023.
All this takes place, as detailed in the IMF report, by “realignment of relative prices and the removal of legacy price controls, as well as past currency depreciation and consequent pass-through to prices”.
The Government launches “plan B” of the financial adjustment
The IMF’s outlook for 2024 worldwide
At a global level, the Fund’s projections indicate that there will be a growth of 3.1% in 2024 and 3.2% in 2025, 0.2 points above the calculations released in October. The improvement is linked to greater resilience than expected in the United States and in several emerging market economies, as well as fiscal stimulus in China.
However, the forecasts for these two years are lower than the historical average of 3.8% (for the period 2000–2019).
When referring to the global context, the IMF Chief Economist maintained that “The global economy is approaching a soft landing, but risks remain”. “The clouds are beginning to dissipate. The global economy begins the final descent toward a soft landing, with inflation steadily decreasing and growth continuing. But the pace of expansion remains slow and turbulence is possible, he stressed.
In this sense, the International Monetary Fund estimated that The general average inflation worldwide will decrease to 5.8% in 2024 and 4.4% in 2025very far, of course, from the projections that are being used for Argentina.
1706627496
#IMF #corrects #estimates #Argentina #fall #GDP #growth #inflation