The OECD projects a 5.7% GDP growth for Argentina in 2025 while anticipating an annual inflation rate of 28.4%. The IMF and World Bank also forecast around 5% GDP growth. Key contributors include reforms by President Javier Milei, a significant tax amnesty generating over $22 billion, and improvements in sectors such as energy and mining. Challenges remain, including currency stabilization and the need for ongoing fiscal responsibility.
The Organization for Economic Cooperation and Development (OECD) projects a 5.7% GDP growth for Argentina in 2025, indicating a pivotal recovery following a period of economic contraction. This forecast highlights a promising trajectory for the Argentine economy, despite an anticipated annual inflation rate of 28.4%, as per the OECD’s latest Economic Outlook, March 2025.
Furthermore, both the International Monetary Fund (IMF) and the World Bank predict an approximate GDP growth of 5% for the same year. The Central Bank of Argentina’s Market Expectations Survey aligns with this optimism, showing projections of a 23.3% inflation rate coupled with a 4.8% GDP growth for 2025.
Significant factors contributing to this growth include economic reforms and fiscal adjustments instituted by President Javier Milei’s administration since December 2023. Notably, inflation rates are expected to decrease from 117.8% in 2024 to 23.3% in 2025, alongside growth in vital sectors such as energy, agriculture, and mining. Increased real wages resulting from disinflation are anticipated to bolster consumption, further enhancing economic recovery.
Moreover, a tax amnesty plan initiated in August 2024 has reportedly generated over $22 billion in new financial flows. Nevertheless, this projected growth follows an estimated 2.8% contraction in 2024, necessitating ongoing efforts to stabilize the currency, which experts forecast to have a nominal exchange rate of 1,175 pesos per dollar by December 2025.
The Argentine government must uphold fiscal responsibility and continue implementing economic reforms to ensure lasting recovery and attract foreign direct investment. The Incentive Regime for Large Investments (RIGI) introduced in July 2024 aims to entice investments exceeding $200 million in various sectors, including energy and technology, by providing significant tax and regulatory incentives.
Additionally, Argentina achieved a notable milestone in early January by repaying $4.341 billion to international bondholders, which is pivotal in President Milei’s efforts to re-establish faith among investors.
In summary, the OECD’s projection of a 5.7% GDP growth for Argentina in 2025 reflects a positive economic trend following recent contractions. Key reforms and fiscal measures have contributed to this growth, despite ongoing challenges such as high inflation. Continued efforts in stabilizing the currency and attracting foreign investment will be crucial for sustained economic recovery in Argentina.
Original Source: eurasiabusinessnews.com
