The OECD anticipates a 5.7% GDP growth for Argentina in 2025, despite ongoing inflation of 28.4%. Key growth factors include government reforms, decreased inflation, and sectoral advancements. While the IMF projects 5% growth, economic challenges persist, necessitating sustained fiscal discipline and investment incentives for long-term recovery.
The Organisation for Economic Co-operation and Development (OECD) has projected a 5.7% GDP growth for Argentina in 2025, signaling a notable recovery from previous economic declines. This optimistic forecast reflects a rebound in performance after a period of contraction, although annual inflation is anticipated to remain high at 28.4%, as noted in the OECD’s Economic Outlook Interim Report for March 2025.
The International Monetary Fund (IMF) and the World Bank have similarly predicted around 5% GDP growth for Argentina in 2025. The latest Market Expectations Survey from Argentina’s Central Bank also supports this trend, projecting a 23.3% inflation rate alongside a 4.8% GDP growth.
Key factors underpinning this growth include economic reforms and fiscal adjustments initiated by President Javier Milei’s administration since December 2023. Notably, inflation rates are expected to markedly decrease from 117.8% in 2024 to an estimated 23.3% in 2025. Additionally, advancements in crucial sectors—such as energy, mining, and agriculture—are contributing to economic recovery, along with rising real wages that enhance consumer spending.
The introduction of a tax amnesty plan in August 2024 has already generated over $22 billion in new financial flows, further bolstering economic conditions. However, this projected growth follows an estimated contraction of 2.8% in 2024, suggesting ongoing challenges.
Experts have expressed concerns about currency stabilization, estimating a nominal exchange rate of 1,175 pesos per dollar by December 2025. It will be vital for Argentina’s government to uphold fiscal responsibility and continue reforms to secure a lasting recovery and attract foreign investments.
In July 2024, Argentina introduced the Incentive Regime for Large Investments (RIGI), designed to provide substantial tax and regulatory incentives for investments exceeding $200 million across diverse sectors. This initiative aims to create a favorable investment climate, ensuring stability for up to 30 years. Additionally, in January, Argentina successfully repaid a significant $4.341 billion debt to international bondholders, marking a pivotal moment in restoring investor confidence under President Milei’s administration.
In summary, the OECD’s projection of a 5.7% GDP growth in Argentina for 2025 underscores a promising economic turnaround after recent contractions. While inflation remains a concern, significant reforms and additional economic activities in key sectors support this recovery. Continued fiscal responsibility and strategic investments will be essential for sustaining long-term growth and stability in the Argentine economy.
Original Source: eurasiabusinessnews.com
