Argentina’s Economic Growth Strengthens Ahead of IMF Accord

Argentina’s GDP grew 1.4 percent in Q4 2024, surpassing forecasts and indicating recovery under President Milei. A new IMF agreement is imminent, expected to enhance economic conditions by easing capital controls. Economists predict a 4.8 percent growth rate for 2025, reflecting a positive outlook for the country’s economy.

In Argentina, President Javier Milei oversaw a second consecutive quarter of economic growth at the close of 2024, enhancing his prospects in the upcoming midterm elections. The gross domestic product (GDP) grew by 1.4 percent in the last quarter, exceeding the analysts’ median forecast of 1.3 percent. Year-over-year growth for the same period reached 2.1 percent, surpassing the Bloomberg economists’ expectation of 1.7 percent.

The economy experienced a notable recovery, expanding 4.3 percent quarter-on-quarter in July to September 2024 after enduring three consecutive quarters of contraction. Recent indicators demonstrate this recovery, including wages outpacing inflation since April and a gradual increase in job growth. Additionally, private sector estimates suggest a decrease in poverty levels after significant spikes triggered by Milei’s inauguration.

A new agreement with the International Monetary Fund (IMF) is anticipated, with a legislative vote expected in the Chamber of Deputies to grant preliminary approval. The ongoing negotiations concerning this loan aim to augment the central bank’s reserves, enabling Argentina to alleviate its capital controls, which are seen as a primary barrier to enduring economic growth. Economists from Argentina’s Central Bank project a GDP growth of 4.8 percent for 2025.

Argentina’s economy has shown unexpected growth under President Javier Milei, with a 1.4 percent increase in the last quarter of 2024, leading to improved prospects for his midterm election performance. Positive indicators such as rising wages and declining poverty accompany the anticipated IMF agreement, which is crucial for lifting capital controls and promoting sustainable growth. Economic forecasts remain optimistic, suggesting 4.8 percent growth for 2025.

Original Source: www.batimes.com.ar