Argentina’s economy will grow 4.4 percent this year, but will suffer a sharp slowdown in 2023, the Organization for Economic Cooperation and Development (OECD) forecast in November.
Analysts fromt he group said in a report, that drop in economic activity in the last two quarters of this year, would have a knock-on effect for the following year.
Thay also warned that Argentina’s government will be forced to roll back on spending, if it is to comply with the targets outlined in its US$44.5 – billion debt repayment programme with the International Monetary Fund.
Despite a likely downturn towards the end of this year, gross domestic product is still expected to rise 4.4 percent, in large part due to an expansion in the first half of the year, the OECD said.
For next year, experts forecast that GDP will rise by just 0.5 percent – way below the two percent predicted in the government’s 2023 Budget bill and the current estimate from the IMF. In practice, if the forecast is correct, it would only be statistical growth based on what is known as the “drag effect”, and in practice the day-to-day situation will not result in improvements for the population, the OECD report warned.
Experts cautioned that “the IMF agreements has significantly reduced near-term macroeconomic policy uncertainty, but the external situation remains fragile”
Meeting existing IMF targets outlined in the restructuring programme will “require further spending restarint”, the report’s author wrote.