The International Monetary Fund has improved its 2022 and 2023 growth forecasts for Argentina, predicting that the economy will grow by four percent this year and by three percent in the following.
The 2022 estimate, in line with the expectations of President Alberto Fernández's government for this year, is a rise of 1.5 points on the Fund’s forecast made in October 2021 and a point higher than its most recent projection at the turn of the year. The 2023 figure is a gain of half-a-point on the Fund’s previous estimate.
The good news for Argentina, however, was not reflected in the IMF’s latest World Economic Outlook report, issued on the eve of its Spring Meetings in Washington. The multilateral lender now predicts that global growth will be 3.6 percent worldwide this year, 0.8 points lower than its estimate in January.
Energy prices are surging, debt levels are rising and shortages remain acute, the IMF noted, as multiple crises including the Ukraine war and coronavirus pandemic fuel an acceleration of inflation.
Price hikes, in particular, are of great concern in Argentina, with the government struggling to tackle runaway inflation, which reached 6.7 percent last month. The IMF said that prices this year would rise by 48 percent this year – the very upper limit of the government’s hopes and below most private estimates. The Central Bank’s most recent survey of economists and consultancy firms forecast inflation of 55 percent this year.
By 2023, price increases in Argentina should slow to 43.5 percent, added the Fund, which also said it saw unemployment reaching 9.2 percent this year and 8.1 percent in 2023.
The IMF said Tuesday that global inflation would average 5.7 percent in advanced economies and 8.7 percent among emerging economies.
Guzmán in Washington
The forecasts were issued as Economy Minister Martín Guzmán was travelling to Washington for the IMF and World Bank Spring Meetings. It will be the first time the official has met with staff from the multilateral lender since Argentina signed a new agreement that restructures its US$44.5-billion debt with the Fund.
Speaking before his departure, Guzmán said that he had crunched the state’s numbers with his team and that Argentina had met “targets for fiscal, monetary and international reserves accumulation” outlined in the freshly inked deal.
He also declared that the government’s economic policies are “in line with what was planned” and would “contribute to stability and to guaranteeing the continuity of the economic recovery."
Argentina’s primary fiscal deficit in the first quarter of the year “was only 0.25 percent of GDP," he said.
Guzmán plans to hold a number of bilateral meetings with officials from Spain, South Africa, Italy, Germany, Indonesia and others while in Washington, though his main focus will be a scheduled sit-down on Friday with IMF Managing Director Kristalina Georgieva.
In addition, he will meet with Axel Van Trotsenburg, operations director for the World Bank, and European Union Commissioner Paolo Gentiloni, among others.
Guzmán also plans to speak at an event organised by the Atlantic Council that looks at Argentina’s economic and energy policies.