Although the latest IMF “staff report” maintained its growth expectations for the Argentine economy at 2% for this yearthe World Bank -which had shared the same estimate- revised his predictions downwards and now expects the country to not grow in 2023 and to grow only 2% in 2024 and the same in 2025. The impact of drought, runaway inflation and limited access to the dollar are the factors that explain this landscape dark .
The entity presented this Tuesday its report “The potential of integration: opportunities in a changing global economy” in which it included what its expectations are for the countries of Latin America and the Caribbean.
The report estimates it regional GDP will grow by 1.4% in 2023, a lower rate than expected. “Rates of 2.4% are forecast for 2024 and 2025, too short to achieve significant progress in poverty reduction,” the document underlines.
This was stated in a press conference by William Maloney, chief economist of the World Bank for Latin America and the Caribbean The situation of Argentina in this context is particular. “Argentina has many problems to solve,” she said. At the same time, he stressed: “We support the program with the IMF. We believe it will help ensure macro stability, which is a prerequisite for capital in the region, not just foreign capital inflows.”
As regards the inflow of dollars into the country and the delicate situation of reserves, Maloney assured that the agency will continue this year to disburse various loans to “work on the social front and on government efficiency”.
The economist recognized this drought is a problem which not only concerns local production, but also crosses the economic realities of neighboring countries, such as Uruguay and Brazil. “It is an increasingly important issue and highlights the attention we have paid to climate change and the need to mitigate the increase in temperatures to make countries more resilient”.
Regarding the outlook for the rest of the countries, Maloney said: “The region continues to be one of the least integrated, while trade openness and international direct investment have stagnated or declined in most cases over the past 20 years. Countries need to find ways to become attractive and take advantage of the trend of business relocation”.
“Also, leveraging the region’s tremendous comparative advantage in sustainable energy production, the products needed for emerging green industries, and its unique natural capital offers a potential new source of growth, but this it will require policies to facilitate access to global markets, capital and technology“.
The report suggests a number of integration policies that countries should consider to take advantage of these opportunities. This includes long-term policies, such as reducing systemic risks, increasing investment in traditional and digital infrastructure, and improving human capital; as well as short-term options, such as preserve macroeconomic stability, drive progress customs and transport regulations, and improve investment and export promotion agencies.
Source: Clarin
