World Bank projects 2% growth for Argentina’s economy in 2023

The World Bank projected Tuesday, Jan. 10, that Argentina’s economy would grow by 2 percent during 2023 while warning about the negative impact of inflation on local activity.

Through a new report entitled World Economic Outlook, the financial institution indicated that “the country’s very high inflation will hinder economic activity” and pointed to challenges in this matter.

The international entity estimated that Argentina’s Gross Domestic Product (GDP) will grow by 2 percent in 2024.

“The slowdown in growth reflects external headwinds and constraints on domestic activity related to the high inflation environment,” the report reflected.

The World Bank document added that “weakening foreign demand is likely to weigh on export growth, while capital, import, and price controls continue to complicate the business environment.”

However, it noted that the Néstor Kirchner gas pipeline expansion project, which is being advanced to the country’s south, will reduce energy imports, benefiting the fiscal accounts.

The World Bank concluded that for Argentina, “the context is highly challenging” given the need to reduce inflation from above 80 percent annually in peso depreciation.

At the regional level, the institution predicted that the GDP of Latin America and the Caribbean will decelerate to 1.3 percent in 2023 while it will grow to 2.4 percent in 2024 amid an “inauspicious global outlook”.