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Optimistic IMF: strong improvement in its growth expectations for Argentina in 2021

2021-04-06T12:55:41.311Z

In January he estimated that the country would improve 4.5% and now he calculates a rise of 5.8% for this year.



Paula Lugones

04/06/2021 9:30

  • Clarín.com

  • Economy

Updated 04/06/2021 9:44 AM

Washington (correspondent) .- The International Monetary Fund on Tuesday improved economic expectations for Argentina and predicted that this year

the country will grow by 5.8% instead of the 4.5%

it estimated in January.

It also presented a more optimistic outlook for employment:

unemployment would be around 10.6%.

The agency presented the traditional

Global Economic Outlook (WEO) Report

 in the framework of the Spring Assembly of the Fund and the World Bank, which usually brings together hundreds of officials from around the world in Washington, but this time it is carried out

virtually

by the pandemic.

In the report, revealed at a conference by the chief economist of the organization, Gita Gopinath,

the IMF projected a growth of the global economy of 6% this year

, (half a percentage point more than expected three months ago), after a

historical contraction of -3.3% in 2020.

Although the Fund points out that the outlook remains uncertain due to the spread of different strains of the virus and the installation of new restrictions in several countries, the agency sees the

advance of vaccination

in several nations

as encouraging

, although it warns that

immunization does not happen to same rhythm in all corners of the planet.

Gita Gopinath, chief economist of the International Monetary Fund, was in charge of disseminating the expected growth figures of the organization to the world.

AFP photo

In the country-by-country estimates, the Fund estimated Argentine GDP growth of 5.8% for 2021 and

2.5% for 2022.

The forecast is

much more optimistic

than that calculated in the last update, last January. , when he estimated that Argentina would grow 4.5% this year.

Although the Fund

did not indicate the reasons

for the improvement in its forecast for Argentina, it is estimated that it is based on the relief of a large part of the restrictions due to the pandemic, the results of a good harvest, the rise in commodity prices. premiums and exchange rate stability in recent months.

The growth forecast by the Fund is a bit more conservative than the one estimated by the

World Bank last week, of 6.4% for this year.

Ellipsis and asterisks

Also this Monday, an improvement in the projection of the unemployment rate in Argentina was announced since the IMF now calculated that in 2021 it will be

10.6% instead of the 11.4% expected in January.

For next year they estimate that it will be around 9.3%.

There were no inflation outlooks for Argentina.

In the section for this purpose, for the country there are only a

few ellipsis and an asterisk

that clarifies that the fiscal and inflation variables are not included because they are "broadly

linked to a negotiation program that is still pending."

This year, the Spring meeting of the Monetary Fund will be held virtually.

AFP photo

The agency is in

the process of refinancing the Argentine debt

of about 44,000 million dollars and it is estimated that

the Government seeks to stretch the negotiation beyond the

legislative

elections

in October so as not to have to implement certain fiscal adjustment measures that it would require in these months. a new program.

Although an improvement in the economic outlook could in theory stimulate better conditions for an early signing of an agreement, it would also give the Government more air to face the maturities of the next few months without much pressure to agree on a program.

What will happen in the world

On the global outlook, Gopinath pointed out that the most encouraging growth prospects were mainly due to "

improvements in advanced economies

, especially in the United States" (1.3 percentage points), which is expected to grow by 6.4% this year. year.

Other powerful economies, including the euro area, will also rebound this year, but

at a slower pace

.

Among emerging markets and developing economies, the Fund expects China to grow 8.4% this year.

Among the Latin American countries, the agency predicts that Peru will grow the most this year (8.5%), while Chile will grow 6.2%, Colombia 5.1%, Brazil 3.7% and Uruguay 3%.

Venezuela will continue with alarming numbers: a fall in GDP of -10%,

although on the rise from -30% in 2020.

Despite the more optimistic forecasts, the Fund warns, however, that the pace of global recovery will not be uniform and that “

these divergent recovery paths create wider gaps in the standard of living of countries

compared to expectations prior to the pandemic, ”Gopinath said.

The average annual loss of GDP per capita during 2020-24, relative to pre-pandemic forecasts, is projected to be 5.7% in low-income countries and 4.7% in emerging markets, while that in advanced economies, losses are projected to be less than 2.3%.

"Progress in poverty reduction is being reversed and an additional 95 million people are expected to fall into extreme poverty in 2020, compared to pre-pandemic projections," Gopinath said.

The Fund also stressed that there must be equity in access to vaccines.

“Countries must work together to ensure universal vaccination.

While some countries will reach widespread immunization this summer, most, especially low-income countries, will likely have to wait until the

end of 2022 ”

.

"Accelerating vaccines will require increasing production and distribution, and also expediting exports, fully financing COVAX, since many low-income countries depend on these doses and ensuring equitable global transfers of excess vaccines," said the economist. .

NE

Look also

Developing countries ask the IMF not to charge interest on the debt

The United States will propose to apply a global tax on multinational companies

Source: clarin

All business articles on 2021-04-06

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