OECD raised economic growth projections for Argentina

The Organization for Economic Co-operation and Development (OECD) today modified the projection of Argentina’s GDP growth of 7.6% for this year. This is 1.5 points higher than the previous estimate made last May. Similarly, the multilateral organization has also raised its projection for 2022 by one tenth, to 1.9%.

In this way, Argentina would be at the end of 2022, just 4 tenths of a point from reaching a GDP similar to that recorded before the coronavirus pandemic. In 2020, Argentina’s economy recorded a drop of 9.9% according to the “Economic Outlook” report.

In this context, the world economy, which fell by 3.4% during the crisis, is set to rebound 5.7% this year (a tenth less than the previous projection), according to the OECD, driven by “strong government support, the development of effective vaccines and the resumption of many economic activities “. Meanwhile, next year it would rise 4.5%, one decimal more than the forecast for May.

In the case of the United States, GDP growth has been revised downwards from 0.9% to 6%, while in the case of the euro area (those countries which use the euro as their currency), the forecast was increased by 1 point to 5.3%. “The Delta variant struck very well that it is recovering again with a lot of force”, explained of the American case, Laurence Boone, chief economist of the OECD at a press conference held today. .

For its part, in the case of China, its expansion estimate remains at 8.5%, while for Mexico and Brazil it increased by 1.3 and 1.5 points to 6.3% and 5 , 2% respectively. With these projections, global GDP will return to “its pre-pandemic level”, although the OECD has warned that “output and employment gaps remain in many countries”, particularly those where ” vaccination are low “. “Greater efforts are needed to provide low-income countries with the resources to immunize their populations,” he said.

Despite the rapid rebound, the Parisian organization warned not only against these inequalities but also against the inflationary problem generated by the recovery in demand, the rise in the price of raw materials, the problems in the supply chains; and rising transportation and freight costs. He also warned that the slow pace of vaccination or the emergence of new variants of Covid still pose risks to the growth of the economy.

Price increases are expected to average 4.5% in G20 economies, then slow to 3.5% by the end of 2022. In the case of Argentina, the report raises its forecast of inflation of 2 and 6.5 points for 2021 and 2022, to settle at 47% and 48.3% per year, respectively. In this sense, the rebound in inflation mainly affected the United States, Canada, the United Kingdom and certain emerging economies. “Short-term inflationary risks will emerge, especially if pent-up consumer demand is stronger than expected, or if supply shortages take longer to resolve,” the report said. “Inflation is expected to remain at a higher rate than previous levels of the pandemic,” he adds.

However, the organization stressed to governments that an accommodating macroeconomic policy as well as monetary stimuli must persist, avoiding a “sudden and premature elimination of aid policies” until “the short-term outlook is better. safe and that the labor market has recovered “.