IMF Cuts Argentina Growth Forecast to 2.1% From 3.5%
ARGENTINA · ECONOMY
Key Facts
- —The country Argentina is a South American grain and energy exporter led since December 2023 by libertarian President Javier Milei.
- —What happened The International Monetary Fund (IMF), the lender of last resort for governments, cut its 2026 Argentina growth forecast to 2.1% from 3.5%.
- —Why it matters Slower growth weakens Argentina’s ability to repay debt held by US investors, a year after Washington’s US$20 billion swap line.
- —The numbers The IMF now sees growth of 3.5% in 2027, down from 4%, average inflation of 32.5% this year and unemployment of 7.6%.
- —Prediction markets Polymarket gives a 61% chance that Argentina’s 2026 inflation lands between 30.0% and 34.9% (13 October, 2:18 a.m. ET).
- —Still open An IMF payment of about US$869 million is still pending, and the government needs a waiver after missing its first-half budget target.
The International Monetary Fund cut its Argentina growth forecast for 2026 to 2.1% from 3.5% late on Monday 12 October, US Eastern time. The figure is in its World Economic Outlook, released at the IMF and World Bank annual meetings in Bangkok, Thailand.
The downgrade matters to Americans because Washington has bet heavily on President Javier Milei’s reforms. The US Treasury set up a US$20 billion currency swap with Argentina’s central bank in October 2025.
What the IMF Changed
The new Argentina growth forecast puts 2026 expansion at 2.1%, 1.4 percentage points below the 3.5% projected in April and kept in July. For 2027 the fund now expects 3.5%, down from 4%, according to El Cronista and Ámbito.
Consumer prices are projected to rise 32.5% on average this year and 21.2% in 2027, according to El Cronista and Infobae. Annual averages differ from the December-to-December rate that INDEC, Argentina’s national statistics institute, usually headlines.
Unemployment is now seen at 7.6% this year, up from 7.2% in the previous forecast, and 7.1% in 2027. The IMF also projects a current-account surplus of 0.6% of gross domestic product (GDP) in both years.
A surplus means Argentina should earn slightly more from the rest of the world than it spends there. That helps the central bank rebuild its dollar reserves.
Why the Forecast Fell
Petya Koeva-Brooks, deputy director of the IMF’s Research Department, blamed weaker activity already seen through the third quarter, Infobae reported. She told reporters she expects the economy to start recovering in the last quarter of this year.
Argentina now trails the region, for which the IMF projects growth of 2.3% in 2026 and 2.5% in 2027. World growth is put at 3.1% this year and 3.4% next year, according to El Cronista and Infobae.
The cut follows a similar move by the World Bank, which lowered its own Argentina growth forecast to 2.1% on 6 October. Two global lenders now agree that the rebound under Milei has lost speed.
The US Angle
Argentina’s central bank (BCRA) and the US Treasury signed a currency swap of up to US$20 billion on 20 October 2025, the central bank said. The BCRA repaid the US$2.5 billion it had drawn in December 2025, while the line itself stays in force, La Gaceta reported.
Economy Minister Luis Caputo travels to Bangkok with central bank president Santiago Bausili and economic policy secretary José Luis Daza, La Nación and Ámbito reported. His agenda includes a meeting with IMF managing director Kristalina Georgieva, according to La Nación and El Cronista.
The fund still has to release about US$869 million under the third review of Argentina’s loan programme, La Nación and Infobae reported. The government needs a waiver because its first-half primary surplus, the budget balance before interest, missed the target.
What Prediction Markets Say
On Polymarket, bettors give a 61% chance that Argentina’s 2026 inflation ends between 30.0% and 34.9% (13 October, 2:18 a.m. ET). The 25% to 29.9% range stands at 34.5%, and the market has drawn about US$80,000 in bets.
In a separate contract on the 2027 presidential race, Milei stands at 54.5% against 32.5% for Axel Kicillof, the Peronist governor of Buenos Aires province. Peronism is Argentina’s main centre-left movement and Milei’s chief rival.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
What It Means for You
For US investors in Argentine bonds and shares, slower growth means weaker tax income and less room to repay debt. The lower Argentina growth forecast also adds weight to talks over the pending IMF payment.
For travellers and expats, the IMF expects prices to keep rising by about a third on average this year. INDEC’s September monthly inflation figure, scheduled for Tuesday 13 October, is the next test of that pace.
What Is Not Known
The IMF’s full country tables were not yet on its website on Tuesday morning, so the detail behind the Argentina figures is not public.
It is not known whether the IMF board will grant the waiver Argentina needs for missing its first-half budget target.
No date has been set for the US$869 million disbursement. Neither the IMF nor the Economy Ministry has said what Caputo and Georgieva will agree in Bangkok.
More: Argentina news in English, every day from The Rio Times.
Frequently Asked Questions
What is the IMF’s new Argentina growth forecast?
The IMF expects Argentina’s economy to grow 2.1% in 2026 and 3.5% in 2027. In April it had forecast 3.5% and 4%.
Why did the IMF cut the Argentina growth forecast?
IMF economist Petya Koeva-Brooks pointed to weaker activity through the third quarter of 2026. She expects a recovery to begin in the last quarter of the year.
Does the cut affect US support for Argentina?
The forecast itself changes no agreement. The US$20 billion swap line signed in October 2025 remains in force, and slower growth makes Argentina’s debt harder to service for US bondholders.
What inflation does the IMF expect in Argentina?
The IMF projects average consumer price inflation of 32.5% in 2026 and 21.2% in 2027. INDEC’s September monthly figure is scheduled for Tuesday 13 October.
Sources: BCRA: El BCRA y el Departamento del Tesoro de los Estados Unidos firman un acuerdo de estabilización cambiaria por USD 20.000 millones, 20 October 2025; El Cronista (Bangkok): Para el FMI, Argentina crecerá menos de lo esperado, 13 October 2026; Infobae: El FMI volvió a recortar sus previsiones de crecimiento para la Argentina, 13 October 2026; Ámbito: El FMI recorta la previsión de crecimiento para Argentina, 12 October 2026; La Nación: Caputo viaja a Bangkok en medio de la revisión con el FMI, 11 October 2026; La Gaceta: El Banco Central informó que le devolvió al Tesoro de EEUU los US$2.500 millones del swap, 9 January 2026; Perfil: El INDEC publica la inflación de septiembre, 12 October 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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