The World Bank now forecasts that Argentina will grow four percent this year, a drop from its 2025 figure of 4.6 percent.
That forecast emerges from the World Bank’s “Global Economic Prospects” report, which also projects the same growth rate of four percent for 2027.
Detailing the reasons behind the projected slowdown, the World Bank said that “domestic political uncertainty towards the end of last year provoked episodes of exchange rate pressure, causing increases in interest rates which will hit domestic demand and this year’s growth, according to market expectations.”
It noted the impact of “the support of the United States, including the provision of a currency swap, helped to stabilise the financial conditions.”
“The transition to currency bands in April 2025 will increase exchange rate flexibility, boosting its role as a buffer of shocks,” said the report’s authors.
Despite the slower advance forecast, the World Bank’s regional report has Argentina forming part of the top trio of countries most growing in the region this year, only behind Panama (4.1 percent) and the Dominican Republic (4.5 percent).
In general, the World Bank said the world economy “is demonstrating more resilience than forecast, despite the persistent commercial tensions and the political uncertainty.”
World growth will remain stable in the next two years with a slight fall to 2.6 percent in 2026 to then rise to 2.7 percent next year, said the Bank.
“With each year which goes by, the global economy shows less capacity to grow and apparently greater resilience in the face of political uncertainty,” said Indermit Gill, chief economist and senior vice-president for Development Economics within the World Bank Group.
Nevertheless, he warned: “The economic dynamism and resilience cannot continue much longer along separate paths without damaging the credit markets and public finances,” proposing that “in the next few years, the world economy will grow at a slower pace than in the conflictive decade of the 1990s, while maintaining unprecedented levels of public and private debt.”
“To avoid stagnation and unemployment, the governments of emerging and advanced economies must energetically liberate private investment and trade, rein in public spending and invest in new technologies and education,” concluded the economist.
– TIMES/NA
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