Argentina rejects IMF’s forecasts for recession in 2014-15
(Reuters) – Argentina on Wednesday rebutted the International Monetary Fund’s forecasts for recession this year and next, reiterating its own estimates for economic growth as doubts over the credibility of its data grow.
The IMF said on Tuesday in its flagship World Economic Outlook report that it saw Latin America’s No. 3 economy contracting 1.7 percent this year and 1.5 percent next year.
The global lender said it had revised its estimates for Argentine growth downwards due to “deepening macroeconomic and policy imbalances that are manifesting themselves as high inflation, negative growth, and a rising differential between the parallel and official exchange rates”.
But Cabinet Chief Jorge Capitanich rebuffed the IMF’s criticism in his daily news briefing.
“We disagree profoundly, and with conviction, with these estimates,” Capitanich said.
The Buenos Aires government last month forecast Argentina would eke out economic growth of 0.5 percent in 2014, while expanding 2.8 percent in 2015.
This was much more optimistic than estimates by private analysts, who see the economy contracting between 2 and 3 percent this year as one of the world’s highest inflation rates weighs on consumer spending and industrial output slides.
They say the country’s second default in 12 years in July has worsened the outlook for the already struggling economy.
Critics say the government’s estimates and data have been less credible since the default as it seeks to calm markets and consumers with more optimistic figures.
Capitanich added that Economy Minister Axel Kicillof would attend the annual meetings of the IMF and World bank this week. World policymakers will gather in Washington to ponder how to sustain economic recovery at a time when the United States is about to turn off its money taps.
