The International Monetary Fund (IMF) cut its growth forecast for Argentina’s Gross Domestic Product (GDP) from 5.5% to 4.5% for 2025 and raised the inflation projection to 28%. This is detailed in the latest update of its “World Economic Prospects” report released this Tuesday in Washington.
The document also worsens the outlook for unemployment, increasing from 6.3% to 7.5% and inflation, which goes from 20% to 28% this year, compared to its last report from April of this year.
The forecasts, however, are above (are more positive) than those set by the Market Expectations Survey (REM). A survey carried out by the Central Bank of the main consulting firms and banks in the country. For 2025, they expect on average a real GDP level 3.9% higher than the 2024 average and inflation of 29.8% for this year.
Regarding the generation of foreign currency, the update of the current account balance (exports – imports) carried out by the IMF is even more worrying. Last April, the Fund expected this indicator to be -0.4% of GDP in 2025, that is, it already considered that imports would be greater than exports, within the framework of a backward dollar. However, they sharply worsened the forecast with today’s report, since the organization now foresees a deficit of 1.2% for this year, that is, three times more negative than six months ago.
On the other hand, Morgan Stanley, one of the main investment banks in the United States, warned that the current exchange rate band scheme is not guaranteed despite the help of the United States and calculated 3 scenarios where the dollar would skyrocket after the elections.
In the most favorable, with continuity and broad political support, the dollar would stabilize near 1,700 pesos. If the electoral result is tight, the price could be between 1,800 and 2,000 pesos. On the other hand, a comprehensive defeat of the ruling party could take it above 2,000 pesos. All forecasts, above the bands imposed by the Government.
Statements to contain the dollar
This Tuesday, the Central Bank lost US$349 million and reserves reached 42 billion dollars. Although there was no official information about the outflow of reserves, it is estimated that it was due to payments to international organizations.
On the other hand, financial rates skyrocketed. The surety rate (short term) exceeded 140% of the annual nominal rate and in the REPO round operations were recorded at 150% of TNA. This Wednesday, the Government faces maturities of $3.9 trillion and the Treasury will have to validate very high rates or offer coverage in linked dollars, or ultimately provide the liquidity that banks demand in the face of the rise in reserve requirements.
With this Wednesday’s statements, and the numerous clarifications about what Trump said or didn’t say, the Government sought to bring calm to market expectations, but ended up showing weakness. The market reacted downward and Argentine bonds and stocks plummeted.
Faced with the leap in US interference with Milei, it is necessary to reject any type of agreement and ignore this new form of indebtedness and looting of Milei, which is illegal.
The Left Front has been proposing that an elementary measure of sovereignty is to ignore debts that have been scams against the people, such as that of the IMF. Unfortunately, those who today are called Fuerza Patria are responsible for having legitimized Macri’s debt fraud. They thus set a serious precedent that we must immediately reverse. It is necessary to go out and reject illegal and illegitimate debts in the streets and Congress. We cannot allow Milei to transform us into another star on the Yankee flag.
Source: www.laizquierdadiario.com
