He International Monetary Fund (IMF) He explained the reasons why, in his report, the data referring to both inflation and activity do not seem to reflect the current signals. In a press conference this Tuesday from Washington, within the framework of the Annual Meeting, the credit organization spoke about the situation in Argentina.
When asked about Scope on the reasons why the IMF estimates inflation of 45% by 2025 and why the relative numbers are so high, economic advisor Pierre-Olivier Gourinchas He explained that as “the discussions about the program continue between the authorities and the IMF, while this process continues, “We do not update the projections for the October round” he clarified.
At the same time, he highlighted two aspects in particular as relevant for Argentina. “One is, of course, what is happening on the inflation side, and here I think the progress has been very substantial. We are now seeing month-to-month inflation in Argentina of around 3.5%, and this is down from around 25% since December last year. So there is a very, very significant decline in the inflation rate. And that is something that must be recognized. And the hope is, of course, that the measures in place will continue to improve the situation.”
It should be noted that in the IMF inflation projection for the current year It stands at 139.7%, well above the latest private projections, contained in the Market Expectations Survey, which place it at 123.6%.
The Fund’s estimate also exceeds – and by far – the inflation expected by the Government according to the 2025 budget project. Against the 45% predicted by the IMF, The Executive Branch projects a price increase of 18.3%.
Activity
Regarding economic growth, the economist Pierre-Olivier Gourinchas admitted that the activity contracted substantially in the first half of the yearbut There are signs that it is beginning to gradually recover.
Also here he explained that the figures estimated in the WEO were not updated due to the discussions they have with the Argentine government. The IMF estimates a 3.5% drop in activity for this year and a 5% rebound in GDP in 2025.
However, he acknowledged that “There are signs of a recovery in real wages, private credit and activity,” he asserted.
While acknowledging that the process has ““It has been difficult for the Argentine economy and the drop in growth.”.
The Fund’s numbers also show that the organization expects an improvement on the external front of the economy. It projects a surplus in the current account of the balance of payments of 0.6% of GDP in both 2024 and 2025, reversing the negative balance of 3.2% in 2023.
This result would be achieved despite the weakness projected in some of the country’s main trading partners, such as China, which will grow, according to the IMF, 4.8% this year and 4.5% next year. say below the average of recent decades. For its part, the Latin American and Caribbean region will register one of the lowest expansion rates among emerging countries, of 2.1% in 2024 and 2.5% in 2025.
Regarding unemployment, the IMF estimates that it will rise to 8.2% of the population this year (more than two points above the 6.1% registered in 2023) to fall to 7.6% in 2025.
Source: Ambito
