They believe Argentina will be the country that takes the longest to recover its economy to pre-Covid-19 levels among G20 members.

The Organization for Economic Co-operation and Development (OECD) on Monday said in a report that it forecasted 6.1% growth in Argentina’s economy this year, although factors are limiting the recovery after a decline of the GDP of 9.9% in 2020. The report also believes that the country will be the one that takes the longest to recover levels of economic activity before the pandemic among the members of the G20. Argentina would only recover what was lost in 2026.

According to its Economic Outlook report, the OECD is also forecasting economic expansion of 1.8% in Argentina in 2022, which, if materialized, will leave South America’s second-largest economy at levels consistently below those it has seen. ‘she had before the covid outbreak. 19 pandemic.

In a comparison of recovery rates that includes all G20 members, Argentina is the one that will take the longest to recover to pre-pandemic levels. The comparison assesses the GDP growth of members of this group of countries and the time it will take for each to achieve a GDP per capita equal to what it had shown before the pandemic.

China, Turkey, South Korea, Russia and the United States have already made up for what they have lost, according to the report. Japan, Germany, India and Indonesia will do so this year. Of the region, Brazil will return to pre-crisis activity levels in 2022, while Mexico in 2023. Argentina will be the only one that will take 5 years, according to the estimate.

“Persistent macroeconomic imbalances and further restrictions on mobility will weigh on domestic demand and limit the recovery,” the report warns.

The OECD noted that Argentina is facing a strong second wave of covid-19 and that vaccination is “progressing slowly”, forcing restrictions to tighten in April and May.

Argentina is expected to obtain collective immunity in 2022, according to the report.

In contrast, the OECD has warned that inflation, which is around 40% per year, will remain at high levels, “despite weak domestic demand and tight price controls.”

He also observed that labor market problems affect household income, slowing private consumption, which fell 13.1% in 2020.

“Persistent macroeconomic imbalances and further restrictions on mobility will weigh on domestic demand and limit the recovery”

For this year, the recovery in private consumption projected by the OECD is 2.2%, with a slight increase of 1% expected for 2022.

In addition, the OECD has noted that although there is a slow recovery in employment, the high informality of work will remain a concern.

In its report, the OECD noted that Alberto Fernández’s government had adopted “bold and timely” measures to contain the pandemic and support households and businesses.

The agency expects spending related to the pandemic to be phased out, while noting that higher incomes, in part linked to the high prices of raw materials Argentina exports, helped improve results slightly. budget, which last year he closed with a primary. deficit of 6.5% of GDP.

“This will reduce the need for short-term monetary financing,” says the report, which states that “charting a medium-term path to fiscal sustainability would help build confidence and boost investment.”

The OECD has warned that its forecast for Argentina could change in the event of a disorderly correction in the country’s macroeconomic imbalances, a sudden devaluation of the Argentine peso, higher inflation or prolonged lockdowns in economic activity in due to a worsening of the health emergency.

The OECD has warned that its forecast for Argentina could change in the event of a disorderly correction in the country’s macroeconomic imbalances, a sudden devaluation of the Argentine peso, higher inflation or prolonged lockdowns in economic activity in due to a worsening of the health emergency.

Conversely, projections could improve if the national and international vaccination campaign proceeds at a faster pace or if there is a faster recovery in Brazil.

In its report, the OECD forecasts for this year a growth of 3.7% of the GDP of Brazil, Argentina’s main trading partner.

For the agency, a more competitive exchange rate in Argentina could also boost the country’s exports.

Argentina’s exports of goods and services would grow 6.8% this year and 11.3% in 2022, according to the report.

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