Argentina’s economy grew 10% in 2021, twice as much as forecast by consulting firms

RIO DE JANEIRO, BRAZIL – The Argentine economy grew 10% in 2021, double what was predicted by consulting firms, according to the latest report of the Public Policy Observatory of the National University of Avellaneda (UNDAV).

“With the first period of take-off in the last four years, the economy in 2021 grew twice as much as what was forecast by consulting firms, at 10%”, indicated the survey that collated, among other reports, the forecasts of consulting firms that the Central Bank makes every month through the REM, which reflected an initial average estimate of 5.5% for the year that ended.

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On the other hand, multilateral organizations such as the IMF and ECLAC initially gave a forecast of 4.9%, although later, these same organizations recalculated these estimates upwards. In particular, last July, the IMF maintained that the Argentine economy would grow 6.4%, and then, in October 2021, its forecast was 7.5%, according to the latest World Economic Outlook report.

Also, despite the impact of the pandemic, “the production of the manufacturing sector is already positioned 5.5% above 2019 levels,” stressed the report of the Observatory of Public Policies of the UNDAV led by economist Santiago Fraschina.

“Despite the establishment’s chaotic scenarios, real investment in Argentina grew rapidly. It has already reached the highest levels in the last three years, with a year-on-year growth of 41.9%”, considered the specialist.

Fraschina expressed that “although the recovery of the economic activity is vigorous and it surpassed all the growth forecasts of consulting firms and international organizations, the pandemic is still not under control worldwide”.

For this reason, he continued, “it will be of vital importance to sustain counter-cyclical monetary and fiscal policies to consolidate the reactivation of the productive forces”. On the other hand, he evaluated that the “socio-labor indicators show an improvement, as the macroeconomy continues to improve”.

Thus, in September 2021, “the total number of people with registered work exceeded by 85,200 workers to those computed in the same month of 2019”.

“It should be noted that in an adverse scenario for the full expansion of productive forces, the evolution of registered work denotes a continuous growth from the beginning of 2021 to September. Likewise, in seasonally adjusted terms, a positive variation of 0.6% was observed,” the report stressed.

Finally, they highlighted that “in the last twelve months the Total Registered Wage Index accumulated an increase of 54.2%, while the Registered Private Sector Index expanded by 52.8%, while inter-annual inflation in October reached 52.1%”, among other relevant socio-labor indicators.