He world Bank assured that the Argentine economy fell 2.5% in 2023the last year of Alberto Fernández’s mandate, and estimated a growth of 2.7% in 2024, Javier Milei’s first as President of the Nation. At the same time, predicted that, by 2025, the trend will intensify, with an increase of 3.2%.
This was reflected by the organization through the new edition of the report Global Economic Outlook. “The Argentine economy is expected to recover and expand by 2.7% in 2024 and 3.2% in 2025, after the drought of 2023“said the letter.
For the entity, this improvement in GDP will be due to growth in “the main exports” like “corn and soybeans.” However, he clarified that “the country faces significant political and economic uncertainty between high inflation already one sharp currency depreciationwhich continues to erode consumer confidence.”
Regarding the price increase, with a December CPI which will be announced in the next few hours by the INDEC, and that could be close to 30%, the BM maintains that, looking to the future, and beyond the good estimates about the economy in general, “there are no signs of easing.”
“There is also little room for maneuver for fiscal spending to support activityas the government seeks to address pressing issues of fiscal sustainability,” added the letter, published in the last few hours.
If the 2.7% projection is fulfilled, it would symbolize a recovery after 2023 thatbased on the entity’s estimate, would have left red numbers. It should be remembered that, in 2021, the growth of real GDP at market prices was 10.7% while, in 2022, it was 5%, with a clear downward trend that can be seen reflected in the estimated number for the year recently ended, -2.5%.
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World Bank data and projections for the region
About the region of Latin America and the Caribbeanthe document reflected a “significant economic slowdown, with growth of only 2.2%”although, looking to 2024, the trend will also It is inclined towards gradual recovery.
“The economic outlook for the region suggests a gradual recovery, with a projected growth of 2.3% in 2024 and 2.5% in 2025. While the lingering effects of previous monetary tightening will continue to weigh on near-term growth, its impact is expected to be attenuated“he indicated.
Thus, as inflation decreases, central banks are expected to interest rates will go down“which will reduce obstacles to increased investment“the economists of the World Bank.
Although the specific projections for the rest of the countries are different: in the case of Brazil growth is expected will slow down to 1.5% in 2024, but will recover in 2025 and will be at 2.2%. For its part, in Mexico the increase will be attenuated until 2.6% in 2024 and 2.1% in 2025as a consequence of the fall in inflation and the decrease in external demand.
On the side of Colombiathe improvement will be from 1.2% in 2023 to 1.8% in 2024 and subsequently, advancing to 3% in 2025; Meanwhile in Chile the growth will be 1.8% in 2024 and then will accelerate to 2.3% in 2025.
Likewise, it is projected that Peru will recover from the 2023 contraction, with growth of 2.5% in 2024 and 2.3% in 2025similar numbers to those of Argentina, supported by the increase in “mining production.”
However, the report highlighted that “the modest regional expansion planned is exposed to multiple risks“as” the escalation of geopolitical tensions, especially in the Middle East“which “could disrupt energy markets and cause a rise in oil prices“.
Extreme weather phenomena, for their part, which are intensified by climate change, represent additional threatsparticularly for climate-sensitive sectors such as agriculture, energy and fishing.
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In turn, they pointed to external factors and global trends as contributors to the risk landscape. “Persistent core inflation in advanced economies could be accompanied by high interest rates for a prolonged period, which would limit the monetary and fiscal policies of the region“, they analyzed.
Finally, the text noted that “a more abrupt slowdown than expected in the Chinese economy could have important secondary effects on external demandwhich would affect commodity exports region of”.