The International Monetary Fund (IMF) has lowered its growth forecast for Argentina by one point and is now predicting economic activity will increase by 4.5 percent this year.
An expert report by the multilateral lender also raised its estimate for inflation to 41.3 percent for the calendar year.
In its previous official forecast, issued in April, the IMF had predicted GDP would expand 5.5 percent with consumer prices rising 35.9 percent.
In another blow for President Javier Milei’s government, the IMF also lowered its estimate for 2026, slashing it by half a point to a four-percent improvement.
Inflation next year would be 16.4 percent, according to the report.
In its recent 2026 Budget bill, which has been submitted to Congress for debate, the Milei administration said it expects growth of five percent in 2026 and inflation of 10 percent.
Argentina’s economy contracted 1.3 percent last year.
The IMF outlook is in line with projections from other institutions. In a recent report, the World Bank said it now expects Argentina to grow 4.6 percent next year, down from its previous estimate of 5.5 percent
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) anticipates 4.4 percent growth this year.
According to the IMF, Argentina’s unemployment rate will rise to 7.5 percent by the end of the year – a rise of 1.2 points up on its previous estimate. Joblessness will reach 6.6 percent the following year, it added.
Zooming out, the IMF’s World Economic Outlook report predicted a slight improvement in global growth to 3.2 percent this year, with 3.1 percent the following.
The Fund’s technicians warned of “uncertainty in trade policy” given the “absence of clear, transparent, and lasting agreements between trading partners.”
However, they considered that “so far, the more protectionist trade measures have had a limited impact on economic activity and prices.”
"The impact on growth due to the trade shock is modest so far," IMF chief economist Pierre-Olivier Gourinchas told reporters ahead of the release of the report.
Latin America and the Caribbean will grow by 2.4 percent in 2025, unchanged from last year, a "stable" figure despite the threat of US tariffs, said the Fund.
The region's economy "will fall slightly to 2.3 percent in 2026," continued the report.
While Argentina remains the nation with the highest projected growth this year, despite its downgrade, the upward revision "is largely due to Mexico, which is expected to grow by one in 2025, 1.3 percentage points more" than had been projected in April, said the Fund.
Brazil will also grow slightly more than expected, at 2.4 percent, although this is a decline from the 3.4 percent recorded in 2024.
Colombia will grow by 2.5 percent, Chile by 2.5 percent and Peru by 2.9 percent. Ecuador will register 3.2 percent growth, Bolivia 0.6 percent, Uruguay 2.5 percent, Paraguay 4.2 percent and Venezuela 0.5 percent.
– TIMES/NA/AFP
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