OECD lowers 2026 growth forecast for Argentina, tweaks inflation estimate

The Organisation for Economic Co-operation and Development (OECD) has cut its forecast for Argentina’s 2026 recovery, projecting slower growth and higher inflation than previously predicted.

The OECD now sees GDP rising three percent next year, down from the 4.3 percent forecast in September. Meanwhile, inflation is expected to reach 17.6 percent, compared with the earlier 16.5 percent estimate. 

The revisions amount to a 1.3-point downgrade for growth and a 1.1-point adjustment in inflation.

The new projections diverge sharply from the forecasts penned by President Javier Milei’s government in its draft 2026 Budget bill, which predicts five-percent growth and an annual inflation rate of 10 percent.

The OECD also trimmed its outlook for the current calendar year, anticipating a boost for GDP of 4.2 percent, down from 4.5 percent. The international body also raised its inflation estimate to 41.7 percent from 39.8 percent.

Outlining the factors behind next year’s anticipated rebound, the OECD said that “growth will be boosted by investment and exports, thanks to an increasingly favourable environment for companies, less onerous regulations and a dynamic energy and mining sector.”

However, it warned that its less optimistic projections reflected “recently weakened growth and pressures on the exchange rate, which have illustrated the persistent macroeconomic vulnerabilities and political uncertainty.”

The OECD stressed that “a broad-based growth will depend on a greater regulatory reform to strengthen internal competition and promote international trade, while expanding the supply of technical and vocational education.”

It called for a renewed reform push to “maintain fiscal prudence and, at the same time, to boost potential growth.”

The OECD said “monetary policy must remain restrictive in order to reduce inflation in a lasting manner.”

It warned that “volatility episodes could reappear due to low foreign currency reserves, still high inflation and the need for new structural reforms in various political areas.”

Still, the OECD said “a successful continuation of the current reforming boost could lead to more significant improvements than expected in productivity, competitiveness and fiscal sustainability.”

Worldwide, the organisation predicts that global growth will slow from 3.2 percent in 2025 to 2.9 percent in 2026. Growth should strengthen later in 2026 and firm up to 3.1 percent in 2027, “as the impact of tariffs vanishes, financial conditions improve and lower inflation backs demand.”

— TIMES/NA