The OECD projects a 5.7% GDP growth for Argentina in 2025, reflecting an economic recovery post-contraction. Despite a persistent inflation rate of 28.4%, key government reforms and sector growth contribute to this positive outlook. Challenges remain, including currency stabilization and fiscal responsibility to ensure ongoing recovery and investment attraction.
The OECD projects a GDP growth of 5.7% for Argentina in 2025, highlighting a positive shift from earlier forecasts and indicating potential recovery for the nation after prior economic contraction. Despite this optimistic growth outlook, inflation is expected to remain high at 28.4%, as stated in the OECD’s Economic Outlook, Interim Report from March 2025. Meanwhile, the IMF and World Bank estimates approximate 5% growth for the same year.
The Central Bank of Argentina has released the latest Market Expectations Survey, revealing that experts anticipate a GDP growth of approximately 4.8% and an inflation rate of 23.3% in 2025. Key factors driving this growth include economic reforms by President Javier Milei’s government, which began in December 2023, leading to lower inflation rates—from a staggering 117.8% in 2024 to the projected 23.3% in 2025. Key sectors like energy, mining, and agriculture are also contributing significantly to this revitalization.
Further elements supporting economic growth include an increase in real wages spurred by disinflation and enhanced consumer spending. Additionally, a tax amnesty plan introduced in August 2024 has successfully generated over $22 billion in new financial flows, bolstering the recovery.
Nevertheless, the anticipated growth follows a 2.8% contraction in 2024, indicating challenges ahead. Currency stabilization remains critical, with experts forecasting a nominal exchange rate of 1,175 pesos per dollar by December 2025. Continued fiscal responsibility and further economic reforms are essential for long-term recovery and attracting foreign direct investment.
The Incentive Regime for Large Investments (RIGI), initiated in July 2024, aims to entice investments exceeding $200 million across various sectors by providing significant tax and regulatory incentives. This creates a stable environment for investment lasting up to 30 years. Recently, Argentina made a pivotal debt repayment of $4.341 billion to international bondholders, representing a step towards regaining investor trust and confidence.
In summary, Argentina’s projected 5.7% GDP growth for 2025 reflects significant economic recovery following years of contraction. Influenced by government reforms, lower inflation rates, and strengthening key sectors, the outlook is promising. However, persistent inflation and the need for fiscal discipline pose ongoing challenges. The government’s strategic initiatives and successful debt repayments are vital for maintaining growth momentum and attracting investments.
Original Source: eurasiabusinessnews.com
