The IMF predicts that Argentina will grow this year by 4% and have 48% inflation

The International Monetary Fund is already forecasting Argentina will grow by 4% this year (more of a point than he expected in January) despite the global slowdown due to the war in Ukraine, and that inflation will reach 48% in our country, same as they estimated at the signing of the agreement, although experts predict that the price index will exceed that figure.

The IMF on Tuesday presented the Global Economic Perspective (WEO), the Global Economic Perspectives report, within the framework of the organization’s Assembly and the World Bank that began this week in Washington in person and virtually.

the minister Martin Guzman will participate in this meeting in the US capital, where it will also hold meetings of the G20, G24 and with World Bank authorities and investors.

The report was presented by the Director of the Research Department of the Fund, Pierre-Olivier Gourinchas, who stated that “global economic expectations have been severely delayed, largely due to Russia’s invasion of Ukraine.” Global growth will be 3.6%, the report announced, down from the 4.4% forecast in January.

“This crisis has spread even though the world economy has not yet fully recovered from the pandemic,” the economist warned. “Even before the war, inflation in many countries rose due to the imbalance of supply-demand and policy support during the pandemic, which prompted monetary policy restrictions.”

Gourinchas pointed out that recent lockdowns in China due to Covid’s resurgence could cause new bottlenecks in global supply chains. And that “in this context, beyond its immediate and tragic humanitarian impact, war will slow economic growth and increase inflation. ”

Regarding Argentina, which in March closed a debt refinancing agreement with the IMF for 44,000 million dollars, the report calculated that growth this year will reach 4%, a point more than the 3% it predicted in January of this year and more than the 3.6% predicted by the World Bank 10 days ago.

The report estimates that GDP will decline to 3% in 2023.

The Fund is also projecting that Unemployment will remain virtually unchanged this year, approximately 9.3%.

Inflation is a plague that the government cannot silence, despite launching “a war” against it. The report indicates that this year it will reach 48% and 51.7% on average. In one section, it noted that inflation projections “reflect the highest range of what is established in the program”, which is between 38 and 48%.

It is also lower than predicted by the private sector, which is at 59.1%, according to the latest REM

By 2023, inflation will be around 43.5%, the Fund predicts.

In the program agreed upon with the Fund, Argentina sought to address “persistently high inflation in a long -term way”, by “a multiple approach” with a reduction in monetary financing of the fiscal deficit and “positive real interest rates”.

The IMF expects the program “anchor of expectations” of inflation, but not. In principle, he estimates that prices will move in the range of between 38% and 48% this year, but everything has worsened.

The Fund has already warned about inflation in our country, especially when it learned of the trigger of the March index, which reached 6.7%.

First, the managing director Kristalina Georgiev, warns about the “real danger” that inflation represents in the world, but then, Ceyla Pazarbasioglu, Director of Policies and Analysis of the agency, considering that the increase in prices in Argentina “It’s paralyzing the economy” of our country and that “inflation is harder for the most vulnerable people” and it needs to “tame” it.

In presenting the report, Gourinchas said that “inflation has become a clear and current danger for many countries.” “Even before the war, it rose because of rising commodity prices and an imbalance between supply and demand.”

He added: “Many central banks, such as the Federal Reserve, have already moved towards tightening monetary policy. War -related disruptions exacerbate those pressures. We now expect inflation to remain high. longer. In the United States and some European countries, it has reached its highest level in more than 40 years. ”

Gourinchas said that “there is a growing risk that inflation expectations are deviating from central banks’ inflation targets, prompting a more aggressive and stringent response from policymakers. In addition, rising food and fuel prices can also significantly increase the prospect of social unrest in poor countries.