Argentina’s economy will contract by 3.5 percent this year, before bouncing back in 2025 with five percent growth, according to the World Bank.
The forecasts, which come from the institution's latest global economic outlook report, came as the World Bank warned that Latin America's economy overall will only grow 1.9 percent – slightly more than expected but less than other regions.
The multilateral institution, however, sounded an optimistic tone on prices, stating that Latin America and the Caribbean is "close to winning the battle against inflation and turning the page on the macroeconomic problems caused by the pandemic.”
Argentina’s growth estimate for 2024 is one of the worst in the region – only Haiti’s economy is expected to perform worse, contracting 4.2 percent.
However, the World Bank said it expected five percent growth in 2025, a move its staff said could significantly improve the fight against poverty, which today affects more than 50 percent of the population.
Speaking at a press conference, William Maloney, the World Bank's chief economist for Latin America and the Caribbean, highlighted the progress made by President Javier Milei's government since taking office last December.
“Argentina had a difficult year ... mainly because of quite extreme fiscal adjustments that were necessary,” said Maloney.
‘Bringing inflation down from 25 percent a month to four percent a month, which is a major achievement, requires getting the fiscal accounts in order and being able to run a sensible monetary policy,” he said.
“It is a great step forward, and we are already seeing some recovery in the automotive automobile, motorcycle, and real-estate sectors. We expect this to continue,” he added.
"The key to continuing to make progress is to have sustainable fiscal accounts, so that is where we have to continue to make progress," said Maloney.
Milei, who took office with a vow to slash government spending, has successfully reduced inflation though at the cost of falling consumption.
Official data released last month showed that 52.9 percent of people live in poverty.
– TIMES/AFP/NA
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