The International Monetary Fund predicted this Tuesday that the global economy will have problems of strong growth and inflation next year and Argentina, involved in its own crisis, will also suffer this phenomenon in an election year: the organization predicted that our country it would have a slowdown from 4% to 2% in 2023 and the price index will fall but remain high, around 60%.
The Fund released the Global Economic Outlook (WEO) report, as part of the organization’s and the World Bank’s Annual Assembly, which takes place this week in Washington, where Economy and Finance ministers and central bank presidents of all the world .
Minister Sergio Massa arrives this Wednesday to participate in the intense days at the Fund, where he will meet the main authorities following the Argentine case, but will also have meetings at the IDB, others within the G20 and bilateral.
In its annual report, the Fund provides that global growth will remain unchanged in 2022 compared to its previous calculations, to 3.2%, but which will slow to 2.7% in 2023, more than expected. And that many of the world’s great economies will be close to recession.
As for Argentina, it predicted that it will grow by 4% this year and that GDP will slow to 2% next year. The figures are in line with those revealed last week by the World Bank and slightly above the South American growth average of 3.6% this year and 1.6% next year.
Argentina follows the trend of this global phenomenon and is also linked to a $ 44 billion program with the agency, which is under constant supervision. In fact, last Friday the board of directors approved the numbers for the second quarter of the year to grant a new disbursement.
With the numbers of staff report released on Friday, the second revision of the program was approved, which ends in June, albeit with a couple of exceptions or thanks regarding the accounting of reserves. But the Fund warned that the growth prospects for 2023 have been revised downwards due to the impact of the weakness of the world economy, the adjustment that Minister Sergio Massa was making and other internal factors. “Including the uncertainties related to the presidential elections” next year.
In the report, the Fund predicts that annual inflation for 2022 will be 95%, measured at the end of the period, and corresponds to the 90-100 percent range in the latest staffing report, about 30 percentage points above the end-June projection. It is also the amount that is managed in the budget.
Although the report did not mention the details of Argentina – a more specific overview should be offered on Thursday when the report focusing on Latin America is revealed – in the staff report They had already anticipated that the increase in prices is the result “not only of the increase in world prices of food and energy in the first half of the year, but also of the strengthening of domestic demand and the increase in political uncertainties,” which contributed to the un-anchoring of inflation expectations.
Inflation in Argentina is one of the highest in the world. In the region it is only surpassed by Venezuela, which this year reaches 220% and next year drops to 150%.
Unemployment in our country, meanwhile, will be 6.9% this year and next, slightly lower figures than in Brazil, Colombia, Paraguay and Uruguay.
Due to sustained inflation, the most powerful central banks have begun to raise interest rates to control prices, which has led to a strengthening of the dollar, the report said. In this financial scenario, the Fund expects there will be a weakening of commodity prices, which would complicate Argentine exports and the arrival of dollars for reserves.
One of Massa’s goals during his visit to Washington is to achieve more support to stabilize the economy and strengthen reserves by opening more markets. The minister will also visit the IDB, where this Wednesday they will be waiting for him with good news as the board of directors has in the folder to approve tomorrow part of the disbursement of the free availability that was promised weeks ago to shore up the coffers of the Central.
As confirmed in Clarione The IDB expects an initial $ 700 million loan to be approved in tomorrow’s board session and another $ 500 will soon be added, a figure that would complement the freely available 1,200 in the pipeline.
Source: Clarin
