The International Monetary Fund will review its 2022 inflation forecast for Argentina due to the impact of the war in Ukraine, a spokesperson for the multilateral lender confirmed Thursday.
Speaking during his regular press briefing, IMF spokesperson Gerry Rice said that a new estimate would be revealed once the body’s Board of Directors had approved the IMF authorities’ latest quarterly review of Argentina’s US$44-billion debt restructuring deal.
"There is no set date for bringing this review to the board, although it normally takes between three and six weeks,” said Rice.
In order to take into account the local economic situation, he indicated there would be an upward revision of the inflation forecast included to take into account the impact of the war in Ukraine on the prices of raw materials and global food prices.
Nevertheless, he repeated the Fund’s line that existing targets for the country’s fiscal deficit, accumulation of Central Bank reserves and monetary financing would not be changed.
Inflation is expected to exceed 70 percent by the end of the year, according to the Central Bank’s most recent survey of experts and economists published last Friday. The most recent IMF estimate forecast a rate of between 38 and 48 percent – a figure most consider to be way out of reach.
Prices have risen by 58 percent over the last 12 months alone, jumping 6.7 percent just in April.
Continuing with forecasts, the Organisation for Economic Co-operation and Development (OECD) warned Wednesday that the world economy will pay a "hefty price" for Russia's invasion of Ukraine as it slashed its 2022 growth forecast and projected higher inflation.
The Paris-based organisation, which represents 38 mostly developed countries, is the latest institution to predict lower GDP growth due to the conflict, which has sent food and energy prices soaring.
In its latest economic outlook, the group said global gross domestic product would grow by three percent in 2022 – down sharply from the 4.5 percent estimated in December.
The OECD also doubled its forecast for inflation among its members – which range from the United States to Australia, Japan, and Latin American and European nations – to 8.5 percent, its highest level since 1988.
The World Bank revised its own figures on Tuesday too, lowering its global growth forecast from 4.1 percent to 2.9 percent. The IMF cut its forecast by nearly one point to 3.6 percent in April.
Argentina’s economy will grow by 3.6 percent this year, the OECD forecast – a rise of 1.1 points. For 2023, the OECD forecasts that GDP will improve 1.9 percent, a large drop on the three percent forecast by the IMF back in April.
In a report, the organisation highlighted the government’s agreements with external creditors as factors that “reduce uncertainty and help to gradually reduce long-standing macroeconomic imbalances.”
Elsewhere in Latin America, Brazil’s economy is expected to grow by 0.6 percent, instead of the 1.4 percent forecast in December, according to the OECD. Mexico is expected to grow by 1.9 percent (down 1.4) this year, and Colombia by 6.1 percent (up a point).
The OECD also cut its growth forecast for the United States from 3.7 percent to 2.5 percent and that of China, the world's second-biggest economy, from 5.1 percent to 4.4 percent. The eurozone's GDP is now seen growing by 2.6 percent instead of 4.3 percent while Britain's outlook was lowered to 3.6 percent from 4.7 percent.