The International Monetary Fund (IMF) on Tuesday lowered its growth forecast for Argentina and raised its projection for inflation, highlighting a deterioration in the country’s internal and external conditions.
According to the latest edition of the Fund’s World Economic Outlook (WEO) report, which is issued twice a year, the IMF now expects Argentina’s gross domestic product to expand by 3.5 percent in 2026 – a downgrade of 0.5 points. In 2027, the economy should expand four percent.
The lowering of Argentina’s forecast is largely due to a slowdown in economic activity in the second half of 2025, said IMF Research Department deputy director Petya Koeva-Brooks said at a press conference in Washington DC on Tuesday.
The period coincided with the currency turbulence leading up to last year’s October midterm elections.
Like many other nations, the impact of the war will be both positive and negative. Higher oil prices can improve potential revenues in export sectors like energy, but they also complicate efforts to slow inflation, increase logistics costs and complicate the climate for investments.
Reflecting ongoing concerns about price hikes in the context of energy instability and war in the Middle East, IMF technicians also predicted that Argentina’s inflation this year will close out the year at 30.5 percent – a large 10-point jump on previous estimates.
Consumer prices are predicted to rise 15.7 percent in 2027, according to the Fund.
Drilling down into the job market, the IMF predicts that Argentina’s unemployment rate at the end of the year will be 7.2 percent.
Despite the more adverse outlook, Argentina continues to appear relatively well-positioned regionally. The country is expected to outperform all the region’s leading economies, including Brazil (1.9 percent in 2026) and Mexico (1.6 percent), with the exception of Paraguay (4.2 percent) and Venezuela (four percent).
The IMF projects overall growth of 2.3 percent for Latin America and the Caribbean this year and 2.7 percent in 2027.
In its report, the IMF said Brazil could benefit from the conflict due to its status as a net energy exporter. Venezuela – which changed leader after Nicolás Maduro was captured by the United States in January – is an oil producer that could also benefit from instability in the Persian Gulf.
“A slowdown in global demand, rising input costs (including fertilisers) and tighter financial conditions” will dominate next year, weighing somewhat on the South American giant’s economy, the IMF said.
The global economy is set to grow by 3.1 percent this year, said the IMF. That’s a drop from the 3.3 percent forecast in January before hostilities erupted in the Middle East.
"We were planning to upgrade growth for 2026 to 3.4 percent" if not for the war, said IMF chief economist Pierre-Olivier Gourinchas on Tuesday.
Although overall revisions to global growth and inflation appear modest, the IMF cautioned that the war has taken a bigger toll on the Middle East and "vulnerable economies" elsewhere.
"The impact on emerging market and developing economies would be almost twice that on advanced economies," the Fund said.
Latin America and the Caribbean remains a region of stark economic contrasts, illustrated by Venezuela’s inflation outlook: 387 percent in 2026 – a sharp rise from the 252 percent recorded in 2025, according to the Fund.
In contrast, Bolivia’s outlook is markedly weaker. After a 1.2 percent contraction in 2025, the economy is expected to shrink by a further 3.3 percent this year.
Colombia is expected to grow by 2.3 percent, Chile by 2.4 percent, while Uruguay will remain unchanged from 2025 with expansion of 1.8 percent.
Peru is forecast to grow by 2.8 percent and Ecuador by 2.5 percent, both slightly below their 2025 levels.
The Fund groups Central American countries together and leaves their growth forecast unchanged at 3.7 percent – rising to four percent in 2027.
The Caribbean, meanwhile, is set to post the strongest expansion in the region, at 5.7 percent in 2026 and 8.6 percent in 2027.
– TIMES/AFP/NA
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