Argentina and Haiti will be the countries with the greatest decline in the economy this year, according to a World Bank report. According to the projections of the international organization, while the Haitian economy will fall by 4.2 percent, the local economy will do so by 3.5 percent of its product.
In this scenario, the World Bank’s chief economist for Latin America and the Caribbean, William Maloney, expressed concern about the increase in poverty, as the spokesperson for the International Monetary Fund, Julie Kozack, had done before, although he also highlighted “the efforts” of the government of Javier Milei.
The organization was optimistic about the rebound that the economy may present starting in 2025 and that this recovery can help reduce the poverty rate. “The key to continuing progress is to be able to have these sustainable fiscal accounts, so that is where we have to continue moving forward,” said Maloney.
The economist said that the decline in the economy was due to “the extreme fiscal adjustments that are taking place,” although he considered that “they are necessary to lower inflation from 25 to 4 percent monthly, which is an incredible achievement.” What Maloney did not say is that it was the Milei government that brought inflation to 25 percent with the initial devaluation and deregulation of the economy, as well as the difficulty in reaching the desired 2 percent despite the acute recession.
“This requires having the accounts in order to have a sensible monetary policy. So we are already seeing some recovery in the automobile sector, motorcycles, real estate. We expect this to continue, that is why we are including a projection of 5 percent growth for next year,” he said.
The growth outlook for Argentina in 2025 is one of the highest in the region: it would only be surpassed by the jump in Guyana’s economy, which according to the World Bank will increase its GDP by more than 40 percent this year and extend its recovery next year. with an increase of 12 of its product.
He said that in Argentina “improvements have been seen in recent quarters.” “We have faith that, with the growth projected next year, there will be a recovery to previous levels of poverty and, with luck, they will be able to improve their economy,” he said.
The global outlook could be favorable, not only for Argentina but for the entire region. According to the World Bank, Latin America and the Caribbean will grow 1.9 percent in 2024 and another 2.5 percent next year.
IMF warning
In the midst of the economic crisis, the IMF also warned last week that the social situation is “very delicate” and asked the Government to make efforts to improve it. In parallel, he assured that “there are signs of an incipient recovery” of the activity. The statements were part of the Thursday conference of the organization’s spokesperson, Julie Kozack, who in conversation from the headquarters in Washington also considered that inclusive growth should be a libertarian “priority of the Government.”
The Director of Communications of the Fund spoke about the high poverty rate of 52.9 percent reached in Argentina at the end of the first half of the year. “We have systematically recognized the very delicate social situation, and this has been demonstrated in the recently published poverty data,” Kozack noted.
He stressed that “addressing these high poverty rates and ensuring that growth is more inclusive remains a priority for the authorities, who continue to take measures to protect the most vulnerable.”
“Continued measures to reduce inflation and reforms to promote employment and investment should lead to an improvement in real wages and economic activity in the future, and I just want to say that our staff continue to be actively involved in this very important area. important,” Kozack stressed.