The World Bank yesterday cut projections for the Argentine economy this year. According to the World Economic Outlook report, “global growth has slowed markedly and the risk of financial stress in emerging markets and developing economies (EMEDs) is intensifying, against a backdrop of high global interest rates.”
In this scenario, the Bank corrected Argentina’s growth prospects downward, since last April it considered that the country’s GDP would remain at the same level as in 2022 (0% growth of the economy). Now the multilateral organization predicts that Argentina will enter a recession and GDP will fall 2% in 2023, although they also projected a recovery of 2.3% in 2024, in a precarious context that is hitting the global economy and emerging countries in particular. according to the latest World Bank estimates released yesterday.
Due to the evolution towards the precariousness of global conditions, where world growth is expected to slow down, from 3.1% in 2022 to 2.1% in 2023, the growth projections for the country were reduced by two percentage points, which until April they projected to be maintained.
In this regard, World Bank Group President Ajay Banga stated: “The surest way to reduce poverty and expand prosperity is through employment. However, slower growth makes job creation much more difficult.”
“Growth forecasts do not represent an inexorable destiny, we have the opportunity to reverse the trend, but we must all work together to achieve it,” he considered.
According to the World Bank, “as global credit conditions become increasingly tight, one in four MEED have lost access to international bond markets.”
The pressure is especially severe in the case of emerging underlying vulnerabilities, such as poor creditworthiness.
Growth projections for these economies for 2023 are less than half of those forecast a year ago, making them highly vulnerable to further shocks, they highlighted.