Exciting Times Ahead: World Bank Projects 5% Economic Growth for Argentina in 2025

Argentina’s economy faced a tough year, shrinking by about 2.8% in 2022. However, 2023 looks promising. The World Bank predicts a strong recovery, estimating a growth of around 5% this year thanks to a boost in agriculture and mining.

Despite this optimism, inflation remains a challenge. In the latter half of 2022, food prices climbed, and general inflation showed some persistence. Still, the new government under President Javier Milei is ready to guide the country through this change.

The World Bank expects growth to continue, forecasting an additional 4.7% growth in 2026. While the global economy is expected to remain steady, Latin America as a whole may see a growth of 2.5% in 2025, largely driven by Argentina’s recovery and a decrease in inflation.

Looking at the wider region, different countries have varying growth predictions. Brazil is expected to grow by 2.2%, Mexico by 1.5%, and Colombia by 3%. Other nations, like Chile and Peru, are also predicted to see modest growth, ranging from 2.2% to 2.5%.

The Caribbean has an even brighter outlook, with growth expected to hit 4.9% largely due to advancements in Guyana’s oil sector.

However, the World Bank also warns about potential risks that could affect these predictions, including fiscal instability and persistent inflation. These factors could create challenges for sustained growth.

On a global scale, the World Bank reports that overall growth could remain at historic lows, especially in developing countries. They anticipate a steady growth of about 2.7% across 2025 and 2026. Yet, this pace isn’t enough to significantly reduce poverty or meet development goals.

Since 2014, economic growth per person in developing nations (excluding China and India) has lagged behind wealthier countries by approximately 0.5 percentage points. To counter this trend, there’s a call for developing nations to embrace reforms that enhance private investment and improve trade relationships.

While regions like sub-Saharan Africa and the Middle East may see more vigorous growth, areas such as East Asia and Europe may struggle due to weaker domestic demand.

Overall, the World Bank highlights a shift in economic growth rates over the last two decades. The rate dropped from 5.9% in the 2000s to around 3.5% in the current decade.