The OECD sharply revised its inflation forecast for Argentina upwards to
250.6% this year,
compared to the 157.1% projected in November, in the wake of the first measures adopted by the ultra-liberal president, Javier Milei.
"General inflation
accelerated at the end of 2023
, implying a strong carryover effect for average annual inflation in 2024," estimated the Organization for Economic Cooperation and Development, based in Paris.
"Monthly inflation shot up to 25.5% in December 2023 and is expected to
be at similar levels in January
. This explains the strong upward revision," explained Jens Arnold, head of the organization's Economics department.
Since taking office less than two months ago, Milei devalued the peso by 50%, began a process of liberalizing prices and proposes to modify hundreds of regulations and laws to try to reverse a crisis that keeps more than 45% of the Argentines in poverty.
"High inflation and considerable fiscal adjustment are expected to cause
a fall in GDP in Argentina in 2024
, before growth recovers in 2025, when reforms begin to take effect," states the OECD quarterly report.
The organization predicts
a stronger recession this year
, with GDP contraction of 2.3%, compared to the 1.3% projected in November.
In 2025, Argentina would grow again, with a GDP expansion of 2.6%, seven tenths above the previous forecast.
That year, inflation would be 64.7%, according to the economic organization.
"Argentina's macroeconomic policies have embarked on a positive path towards stabilization and reduction of accumulated imbalances, but along this path,
things are first getting worse before they get better
," Arnold noted.
After coming to power, Milei had warned that the situation would worsen in Latin America's third-largest economy, initially with "stagflation", that is, a combination of stagnation with high inflation in 2024.
On Wednesday, the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, estimated that the Argentine government "is taking bold measures to restore macroeconomic stability."
With information from AFP