IMF downgrades Argentina's economic outlook for 2024

WASHINGTON

An appraiser weights gold jewelry at a gold dealership in Buenos Aires on June 6, 2024.

The International Monetary Fund (IMF) sharply downgraded its 2024 economic outlook for Argentina on June 17, as the country implements a series of wide-ranging economic reforms under its new president, Javier Milei.

A self-declared "anarcho-capitalist," Milei has vowed to halt Argentina's economic decline and reduce the budget deficit to zero.

Since taking office in December, Milei has embarked on a program to slash public spending and bring down inflation, which remained at an annual rate of more than 275 percent last month.

In updated economic forecasts published on June 17, the IMF said it now expects Argentina's economy to contract by 3.5 percent this year, 0.75 percentage points more than its previous projections, due to a "deeper contraction" in non-agricultural output.

The updated forecasts were published a few days after the IMF executive board voted to approve an almost $800 million payout to Argentina under an existing loan agreement, bringing the total disbursements under the program to more than $41 billion.

The IMF said it now expects Argentine inflation to ease to an average annual rate of 232.8 percent this year, down more than 20 percentage points from its previous forecast in January.

The easing inflation outlook is "supported by refinements in the monetary and FX [foreign exchange] policy framework and a recovery in peso demand from historically low levels," the IMF said in its report.