According to the IMF, Argentina will be one of the countries with the greatest drop in GDP and the most inflation in 2024

The International Monetary Fund maintained its projections for Argentina and for this year GDP is expected to fall 3.5% with inflation slowing from 211% to 140% annually the same level in both cases that it estimated in July. The numbers continue to reflect a situation of fragility, since Argentina will be the fourth country with the greatest decline in its economy and further price increases in the ranking of 147 nations prepared by the organism.

In terms of degrowth, The Argentine economy will only be surpassed by South Sudan (-26.4%), Sudan (-20.3%) and Haiti (-4%)while in the inflation comparison it will be behind Zimbabwe (407.8%), Somalia (242.2%) and South Sudan (216%). The estimates arise from the update of the Global Outlook Report (known as WEO, for its acronym in English) released this Tuesday by the IMF in Washington.

After worsening the growth forecast last July, The Fund’s new projection shows the impact of the adjustment plan started in December by the management of Javier Milei, after the economy fell 1.6% in 2023. Last July, the organization warned in its staff report that activity and demand contracted sharply (3% in the first quarter compared to the previous one) due to the fiscal adjustment and price correction.

By 2025, the IMF is more optimistic and expects activity to rebound by 5%one of the most encouraging forecasts in the entire region and the same one outlined four months ago. In Latin America, the organization forecasts that growth will decline from 2.2% in 2023 to 2.1% in 2024 to rebound 2.5% in 2025. Of that group, Brazil will grow 4% in 2024 and 2.2% in 2025, while Mexico’s GDP will expand 1.5% and 1.3%, respectively.

Besides, The organization foresees a significant drop in inflation and estimates that it will be 45% next year in Argentina. In early October, Fund spokesperson Julie Kozack said the program resulted in a “considerable reduction” in price increases and the fiscal deficit and that there are signs of an incipient recovery, although she acknowledged that the social situation was ” very delicate” after the increase in poverty to 52.9%.

“The global battle against inflation has been largely won, although price pressures persist in some countries,” said the IMF. He added: “Unfortunately, in the medium term global growth remains lackluster, at 3.1%. While much of this reflects China’s weaker prospects, the medium-term prospects in other regions, such as Latin America and the European Union, also deteriorated.

Although the organization considered in July that employment had resisted the drop in sales and consumption in Argentina, in its report this Tuesday it projected an increase in unemployment from 6.1% in 2023 to 8.2% in 2024 and a decrease to 7.6% in 2025without recovering previous levels. The expected increase in unemployment coincides with a situation in which the recovery is delayed due to the weakness of investment and demand.

In this context, the Minister of Economy, Luis Caputo arrived this Monday after noon in Washington to participate in the IMF and World Bank summit. Over therewill meet with officials from both organizations and it is expected that there will be a meeting with the head of the organization, Kristalina Georgieva. The Government seeks to unlock a new program with fresh funds for debt maturities in 2025 for US$ 20,000 million.

The official will also have meetings with representatives of the Inter-American Development Bank (IDB) and FONPLATA. During the week, he will take part in the meeting of the Council on Foreign Relations with government officials and businessmen, and will participate with his G20 peers on a panel on the international economic situation and the macroeconomic perspectives for 2025.

Finally, Caputo will be present at the meeting of the Development Committee of the World Bank and the IMF, and at the session of the International Monetary and Financial Committee (IMFC). And it is expected that he will participate in parallel meetings with banks and investors. He is accompanied by the Secretary of Finance, Pablo Quirno; his Economic Policy counterpart, José Luis Daza; the President of the Central Bank, Santiago Bausili; and the vice president of the entity, Vladimir Werning.