NewsRescue
The International Monetary Fund (IMF) has downgraded Argentina’s economic outlook, projecting a second consecutive year of negative growth despite President Javier Milei’s desire for a “significant policy adjustment” in his country.
The IMF warned in its latest World Economic Outlook update on Tuesday that Argentina’s GDP will fall by 2.8% this year, followed a 1.1% decline in 2023. In October, the IMF predicted 2.8% growth for the GDP in 2024.
According to the research, Argentina’s inflationary spike was the primary factor driving up the 2024 inflation forecast for emerging markets and developing countries to 8.1%.
The [Latin America and Caribbean] forecast revision for 2024 reflects negative growth in Argentina in the context of a significant policy adjustment to restore macroeconomic stability,” the IMF stated.
Latin America’s third-largest economy, Argentina is bearing the brunt of a severe economic crisis after decades of debt and financial mismanagement. An estimated 40% of Argentinians are living in poverty. The nation’s annual inflation rate is among the highest in the world –at over 200%– and is expected to climb faster in the months ahead, after President Javier Milei’s government devalued the peso by over 50% as part of his so-called ‘shock therapy’ reforms to stabilize the ailing economy.
Shortly after entering office in December, the self-described ‘anarcho-capitalist’ Milei launched a significant cost-cutting effort to turn things around. The reforms reduced labour rights, deregulated businesses, and eliminated energy and transportation subsidies, among other things. Despite strong criticism and protests from labour groups, Milei has so far stayed firm on his new policies, warning that results may take time to show and that things may worsen before they improve.
