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The IMF improved Argentina's growth outlook in 2021, but lowered that of 2022

2021-07-27T17:25:15.508Z

The country will grow 6.4% in 2021 and 2.5% in 2022. It is due to the rise in soy prices and the advance in vaccination. Alert for inflation.



07/27/2021 2:14 PM

  • Clarín.com

  • Economy

Updated 07/27/2021 2:14 PM

The IMF improved Argentina's growth projection

and estimated that

GDP will recover 6.4%, an improvement compared to the 5.8% forecast in April

thanks to better export prices and the advancement of the vaccination campaign faster than expected.

On the other hand, the agency slightly revised its forecast for 2022 downwards, by lowering the expected growth from 2.5% to 2.4%

.

The data comes from the global economic outlook report for July presented on Tuesday by the IMF's chief economist, Gita Gopinath, at a press conference.

Argentina benefited from an unexpected increase in the prices of its exports, with an increase in food prices

at the international level.

This positive effect through export prices is helping Argentina to recover, ”Gopinath said.

🆕 The IMF projects the global economy to grow at 6% in 2021 and 4.9% in 2022. The recovery remains uneven across regions, depending on access to vaccines.

More in the updated World Economic Outlook.

https://t.co/yxs2PsXM89 #WEO pic.twitter.com/pwkgQNRBkN

- IMF (@IMFNews) July 27, 2021

The improvement in the forecast for Argentina

is also due to vaccination "faster than we had previously anticipated"

and to the growth of foreign trade, especially with Brazil

, added the deputy director of the Fund's Research Department, Petya Koeva Brooks.

The projection 

is in line with what the Fund expects in other large Latin American economies such

as Brazil and Mexico, whose recovery brought expectations for the region as a whole to 5.8% this year, 1.2 percentage points more than expected in April.

In Brazil

, the IMF

expects growth of 5.3% this year

, with a faster than expected rebound, but next year it will be less than expected.

Argentina's main trading partner

also benefited from the rise in raw material prices and the take-off of the US and China.

Meanwhile,

the global economy will grow 6% in 2021 and 4.9% in 2022

, the same as expected in April, although the recovery will be uneven.

While the outlook for emerging and developing countries was revised downward, especially in Asia, the forecast for the more advanced economies improved.

In this sense,

the report warned of a growing gap at the global level

.

"Access to

the vaccine

emerged as the main limit that

divides the world into two blocks

: those that can expect further normalization by the end of the year (almost all advanced economies) and those that will face an outbreak of cases and deaths from Covid" noted the Fund.

"

Recovery, however, is not assured even in countries where infections are currently at a very low level as long

as the virus circulates everywhere," he concluded.

Indeed, the advance of the Delta variant caused the stock markets to fall in Asia and Europe and led several countries in those regions, together with the US, to maintain or adopt new restrictions.

For 2022, the IMF improved the forecast for 2022 by 0.5% due to the

improvement in developed economies, especially the US due to the early legislation of an additional fiscal stimulus package

in the second half of 2021 and an improvement in health statistics in broad groups.

Inflation alert

Moreover, the report pointed to

price pressures

and noted that

"reflect unusual events related to the pandemic and imbalances of supply and demand"

. "Inflation is expected to return to pre-pandemic ranges in most countries in 2022 once these changes end, although uncertainty remains high," he said.

As for emerging

and developing

countries - such

as Argentina - the IMF predicted without specifying that some

are expected "high inflation"

in part due to higher food prices.

"

Central banks should

navigate transient inflationary pressures and

avoid raising rates

until there is more clarity on the underlying price dynamics."

"

There is, however, a risk that transitional pressures may become more persistent and central banks may need to take preventive measures

," the report warned.

In June, inflation in Argentina slowed to 3.2%, but remained high in year-on-year terms with a 50% rise.

YN

Look also

Rain of pesos: the Central Bank would reissue to help Guzmán

Signal to the IMF: the Government will pay US $ 1.88 billion before the elections

Source: clarin

All business articles on 2021-07-27

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