The International Monetary Fund thinks Argentina’s economy will do even worse this year than it was expecting. The IMF says Argentina will contract 1.8 percent this year, rather than the 1 percent decline it was expecting in April.
On the upside though, the IMF expects Argentina to grow 2.7 percent next year, although that is still 0.1 percentage point less than what the organization had predicted in April, when it said the country would grow 2.8 percent next year.
The numbers come from the IMF’s World Economic Outlook, the report it updates twice a year on the state of the global economy.
In addition to its increasing pessimism about Argentina’s economy, the IMF also didn’t have great news on the inflation front. The IMF said it expects consumer prices to increase 23.2 percent next year, which is higher than the government’s estimates of 17 percent. This year, the IMF said it expects inflation to clock in at a whopping 39.4 percent at the end of the year.
Yet the Fund did sort of excuse the continuing rising prices, saying that in Argentina “high inflation is a byproduct of an ongoing and necessary liberalization process.”
Argentina’s unemployment rate is set to average 9.2 percent this year, and decrease to 8.5 percent next year.
The World Economic Outlook includes lots of information about Argentina’s data as well as implicit praise for the new government for cleaning up the country’s statistics. “On February 1, 2013, the IMF issued a declaration of censure, and since then has called on Argentina to implement specified actions to address the quality of its official GDP data,” points out a “country note” on Argentina. “The new government that took office in December 2015 released a revised GDP series on June 29, 2016. At the IMF Executive Board meeting that took place on August 31, 2016, the revised series was considered to be in line with international standards.”
Argentina’s lack of growth this year will be in line with the region as Latin America and the Caribbean is expected to contract 0.6 percent this year before growing 1.6 percent next year.
As bad as things may be for Argentina, we can at least be grateful not to be Brazil, where the economy is expected to contract 3.3 percent this year before growing 0.5 percent in 2017, according to the IMF’s estimates.