Argentina is in ‘transition’ to growth, says top World Bank official

Argentina is emerging from a very difficult year of fiscal adjustment, but is “hopefully” in “transition” towards the recovery of growth in 2025, says a top World Bank official.

William Maloney, the World Bank’s chief economist for Latin America and the Caribbean, argued that improved growth is the “only way” to reduce poverty that now affects more than half of the population in Argentina.

Speaking to the AFP news agency in Montevideo, Maloney stressed that in order to reduce poverty, economic growth is needed. In order to grow, fiscal imbalances must be remedied, argued the official.

Argentina is “going through, hopefully, a transition period,” said Maloney. “Our forecasts suggest that we are going to recover a lot of growth next year, which is going to reduce poverty.”

“But the most important thing is to lay the foundations for sustained growth at higher levels in the future. And the only way to reduce poverty in the long run is to have decent growth year after year after year,” he said.

“What happened in this year of adjustment was very bad. But the idea is that we keep a medium-term view, where we are growing much more and poverty can be reduced,” he added.

The World Bank forecast back in October that Argentina's gross domestic product will contract by 3.5 percent in 2024, but will grow by five percent in 2025.

Asked about President Javier Milei's policies, Maloney highlighted the La Libertad Avanza leader’s performance on inflation, which in October eased again and moderated to 2.7 percent, after 3.5 percent in September.

Although in the first 10 months of the year, prices in Argentina have risen 107 percent, October's inflation rate is the lowest monthly figure since November 2021 and confirms the slowdown of consumer price hikes.

“It's an achievement,” Maloney said.

The adjustment in Argentina “has had costs, without a doubt,” he conceded, adding that the Milei government has taken some mitigating measures. 

“Obviously it has not been enough, but it is aware of the costs,” said Maloney.
“All I can say is that it is imperative to have a stable macroeconomic base before growing again,” Maloney concluded.

– TIMES/AFP