The OECD considers that the government of the president Javier Miley is taking appropriate fiscal and monetary measures to control hyperinflation in Argentinawhich has to be “the priority to help people”, although the effect at first will be “painful.”
This is the position expressed by the chief economist of the Organization for Economic Cooperation and Development (OECD), Clare Lombardelliwhen asked this Thursday by EFE about the economic prospects of Argentinawhich have been revised sharply downwards for this year.
During the presentation in Paris of the semi-annual report of PerspectivesLombardelli indicated that the Milei Executive is taking “very restrictive” fiscal and monetary measures to try to control inflation.
“It is the right thing to do. It’s true that it takes time to have an effect and in the meantime it can be challenging.he indicated before adding that their forecasts predict a slowdown in the price escalation suffered by the South American country.
Specifically, it expects that after an average inflation of 134.5% in 2023, the rise will skyrocket even further, to 208.1% this year before moderating somewhat to 71.2% in 2025.
In the chapter dedicated to Argentina, the OECD points out that year-on-year inflation has reached 288% in March, “but monthly price variations have begun to moderate”, and in fact observes that “inflation is visibly slowing down” and predicts that “over time it will decrease more pronouncedly.”
In parallel, the OECD believes that the Argentine economy, which already suffered a drop in gross domestic product (GDP) of 1.6% in 2023, will sink an additional 3.3% in 2024.
It is a deeper fall than the OECD itself had calculated in February (-2.3%) and in November (-1.3%). For 2025, it anticipates only a partial recovery of 2.7%. The chief economist admitted that this will be a “painful” period.
The head of Argentine diplomacy, Diana Mondinoparticipates from this Thursday until Friday in the OECD ministerial meeting at its headquarters in Paris, during which the roadmap that has been set for the process of accession to the organization will be presented.
With the arrival of Milei to power, this process that was practically on hold due to the lack of progress by the previous government has been reactivated.
Argentina is one of the six countries that the OECD invited at the beginning of 2022 to prepare for accession, along with Brazil, Peru, Romania, Bulgaria y Croatia. To them has been added Indonesia. EFE (I)
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