Wednesday, April 17, 2024

ECONOMY | 09-01-2024 16:46

World Bank forecasts 2.7% growth for Argentina in 2024

Argentina’s economy likely contracted 2.5% last year, but will record growth of 2.7% in the coming 12 months, forecasts World Bank, which warns of “economic uncertainty” and continuing inflation.

The World Bank’s latest global forecast predicts that Argentina's economy will return to growth in 2024 while sounding the alarm of the potential impact of ongoing “economic and political uncertainty.”

According to the institution, which highlighted the impact of last year’s heavy drought, Argentina’s GDP likely contracted by 2.5 percent in 2023. 

The World Bank forecast that the economy would return to growth of 2.7 percent this year and 3.2 percent in 2025.

The institution expects Argentina’s economy to improve despite the absence of "signs of easing" in inflation, it said in its Global Economic Prospects report.

The forecast “reflects a recovery from the drought of 2023, which caused a decline in the country's main commodity exports (corn and soybeans), worth almost three percent of GDP," said the report’s authors.

Analysing Argentina’s current outlook, the World Bank warned of “significant economic and political uncertainty amid high inflation and a pronounced currency depreciation, which continues to erode consumer confidence.”

It highlighted the relentless rise of prices and warned that “there is also little room for fiscal spending to support activity as the government seeks to address pressing issues of fiscal sustainability.”

Zooming out, the World Bank said that the global economy is on track for a woeful decade of growth unless policymakers can boost investment and strengthen government balance sheets.

Global growth is set to slow from an estimated 2.6 percent in 2023 to 2.4 percent this year, the World Bank said in its report.

If the forecast proves accurate, 2024 would mark the third consecutive year of worldwide economic deceleration, and the slowest half-decade of GDP growth for 30 years.

"Without a major course correction, the 2020s will go down as a decade of wasted opportunity," World Bank Chief Economist Indermit Gill said in a statement.

"Near-term growth will remain weak, leaving many developing countries – especially the poorest – stuck in a trap," he added. 

Growth in advanced economies is expected to slow to just 1.2 percent this year, the Bank said, while emerging market and developing economies should see growth ease slightly to 3.9 percent. 

After seeing reasonable growth in 2023, the United States and China – the world's two largest economies – are both likely to slow in the year ahead.

US growth is forecast to ease from 2.5 percent in 2023 to 1.6 percent this year, while growth in China is also forecast to fall, from 5.2 percent to 4.5 percent, said the institution.



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