Argentina’s economic outlook is splitting opinion among major institutions. While the International Monetary Fund (IMF) is retaining its current growth forecast for 2025, the World Bank, Organisation for Economic Cooperation and Development (OECD) and private analysts have trimmed theirs.
The IMF has kept its projection of 5.5 percent growth for 2025, praising President Javier Milei’s sweeping fiscal adjustment. The Fund highlighted improved exchange rate stability, fiscal tightening and falling inflation as positive signs, though analysts caution that the durability of the rebound will depend on how reforms are balanced with social cohesion.
By contrast, the World Bank now expects Argentina to grow 4.6 percent next year, down from its previous estimate of 5.5 percent, warning of “deep challenges.”
In a recently published report, the multilateral institution still forecast that Argentina remains the country in the region with the highest projected growth.
“Argentina continues to experience a remarkable economic rebound after two consecutive years of contraction, although deep challenges persist,” the report stated.
It also praised Argentina’s fiscal discipline – a feature distinguishing it from the rest of the region. “The country has recently made significant progress toward fiscal consolidation, achieving budget surpluses,” the World Bank noted.
The OECD has lowered its forecast to 4.3 percent and raised its inflation outlook to nearly 40 percent, citing persistent financial instability.
Looking ahead to 2026, the OECD projects a continued recovery, with GDP growing by 4.3 percent and inflation slowing to 16.5 percent.
The Central Bank’s Market Expectations Survey (REM) showed a 0.6 percent contraction in the third quarter and predicted a slower expansion rate next year. Analysts expect a 0.5 percent rebound in the fourth quarter of 2025. On average, they foresee real GDP in 2025 standing 3.9 percent above 2024 levels – 0.5 points lower than previously reported.
Fresh data from a recent FocusEconomics survey show similar caution. A report by the firm – compiling forecasts from local and international consultancies – sees GDP rising 4.4 percent in 2025 and inflation ending the year at 42.1 percent. It expects price hikes to slow to 23.6 percent in 2026 if fiscal restraint holds, but warns that the peso’s recent slide will delay disinflation.
The peso traded at 1,424 per dollar on October 3 under the Central Bank’s managed-float system and is projected to reach 1,496 by December 2025. Market rates have surged, with bank deposit yields jumping from 32 percent in June to 58 percent in August amid investor jitters.
Despite lower forecasts, analysts still see Argentina among Latin America’s fastest-growing economies in 2025 and 2026, helped by deregulation and easing import restrictions. Yet the report cautioned that scenario could change if Milei’s coalition loses ground in the midterm legislative elections.
– TIMES/NA
Comments