He Argentina’s GDP will fall 3.3% this year, placing the country as the one that will experience the greatest economic contraction in the worldbehind, and by far, of Saudi Arabiawhich will suffer a drop of 0.2%.
This was stated by the Organization for Economic Cooperation and Development (OECD) in your report “Economic outlook: Stable global growth expected in 2024 and 2025”presented this Thursday.
“GDP is expected to contract by 3.3% in 2024, before growing by 2.7% in 2025,” the entity indicated in the letter, where it highlighted that “high inflation”he “considerable but necessary” fiscal adjustment carried out by the government of Javier Milei and “political uncertainty” will weigh on “private consumption and investment” for most of the year.
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These numbers represent a deterioration compared to the February projectionwhen the OECD estimated a fall in product of 2.3% for this year. This way, The downward trend in 2023 would continuewhen GDP contracted 1.6%in a context of strong acceleration of inflation, which accumulated in the 12 months a rise of 211.4%the highest on the planet.
The OECD highlighted the slowdown in inflation but warned about consumption
Regarding, precisely, the price increase, the organization maintained that “it is visibly slowing down, although so far only gradually, but it is expected that it will eventually decrease more pronouncedly.”
In this sense, he highlighted that “annual inflation reached 288% in March, but monthly price variations have begun to moderate.”
Milei took office last December with a Consumer Price Index (CPI) that reached 25.5%, the highest figure since the last hyperinflation. However, despite remaining high, the number gradually decreased: it became 20.6% in January, 13.2% in February and 11% in March, according to data released by INDEC.
In this sense, in February the OECD had projected an acceleration in prices of 250.6% annually and now estimates that it will be 208.1% for this year and 71.2% for 2025.
“Regulated prices increased rapidly in early 2024. Price controls have been eased since December to correct relative price distortions, resulting in the adjustment of electricity and public transport rates, fuel prices, prepaid medicines and rents” , the report detailed.
However, the OECD stressed that this is a consequence of a “sharp” drop in activity, which contracted 4.3% in January, compared to the same month last year, with industry, construction, retail sales , financial intermediation and public services as the most affected sectors, the letter highlighted.
In this framework, the entity assured that restoring macroeconomic stability “is essential for recovery”, as well as that “a stricter fiscal policy and the end of monetary financing will support new falls in inflation,” as specified.
“However, the risks around this scenario remain substantial. Low foreign exchange reserves, tight monetary restrictions and high inflation create a volatile backdrop in which sudden currency depreciations and slow disinflation could trigger a recession. prolonged,” he warned.
The Government accelerates the process of joining the OECD
In the last hours, and after her tour of China, Foreign Minister Diana Mondino traveled to Paris, France, to accelerate Argentina’s entry into the Organization for Economic Cooperation and Development, an effort that began in the government of Mauritius. Macri and that had been paralyzed during the administration of Alberto Fernández, who targeted the BRICS.
In this sense, this Thursday he received, in the hands of the Secretary General of the OECD, Mathías Cormann, the ‘roadmap’ with the modalities and conditions of membership, which the National Government must accept to be approved in the entity, known as “the club of developed countries,” reported the DW agency.
The Argentine delegation that escorts the official is made up of Pablo Quirno, Secretary of Finance of the Nation, Marcelo Cima, Secretary of International Economic Relations of the Foreign Ministry, Federico Barttfeld, Chief of Staff of the Palacio San Martín, and Gerardo Díaz Bartolomé, diplomat to in charge of communication at the San Martín Palace.
Four Latin American countries, Chile, Costa Rica, Colombia and Mexico, are already part of the organization founded in 1961 and whose 38 partners, among which emerging powers and states stand out, led by the United States, France, Germany, the United Kingdom, Italy and Japan represents around 80% of world trade and investment.
News in development…