World Bank Revises Argentina's Economic Outlook for 2025
The World Bank announced on October 7, 2025, a downward revision of Argentina's economic growth forecast for 2025, trimming it to 4.6%. This new projection marks a reduction from its earlier estimate of 5.5%, a decrease of nearly a full percentage point. Despite this adjustment, the global institution highlighted a 'remarkable economic rebound' in Argentina following two consecutive years of contraction, attributing this recovery to the government's ongoing stabilization plan.
Details of the Revised Forecast
The updated forecast of 4.6% for Argentina's GDP growth in 2025, while lower than previous expectations, still positions the nation as one of the best-performing economies in the wider Latin American region. The World Bank had previously raised its forecast for Argentina to 5.5% in June 2025. The current revision reflects a cautious outlook amidst a complex external environment characterized by declining global demand and falling commodity prices.
Economic Rebound and Stabilization Efforts
Argentina's economy experienced significant contractions in recent years, with a -1.7% shrinkage in 2024 and a -1.6% decline in 2023, following a -9.9% contraction in 2020. The noted rebound is largely credited to the stabilization plan implemented by President Javier Milei's administration since December 2023. This comprehensive plan focuses on several key areas:
- Strong correction of the fiscal and external deficit
- Realignment of relative prices
- Reduction of monetary imbalance
Among the significant achievements of this plan are the attainment of a primary fiscal surplus for the first time in years and a sustained reduction in monthly inflation, which reportedly fell from 25% in December 2023 to around 2% in August 2025.
Regional Context and Future Outlook
Even with the trimmed forecast, Argentina is expected to be the fastest-growing among the largest economies in the region. The World Bank's Vice-President for Latin America and the Caribbean, Susana Cordeiro Guerra, emphasized that governments in the region have successfully navigated repeated crises while maintaining stability. She urged for accelerated reforms to improve the business climate, invest in infrastructure, and mobilize private capital. The World Bank's overall growth forecast for the Latin America and Caribbean region for 2026 was nudged up to 2.5%, a slight increase from its June forecast of 2.4%, with the forecast for the current year remaining at 2.3%.
6 Comments
Leonardo
It's certainly positive to see Argentina moving towards a primary fiscal surplus and lower inflation. However, achieving sustainable long-term growth will require more than just stabilization; deep structural reforms are still crucial to attract lasting investment.
Michelangelo
A 4.6% growth forecast is solid, especially coming from deep recession, which deserves recognition. However, the almost full percentage point reduction from earlier estimates highlights the fragility of global economic conditions and the challenges Argentina still faces in maintaining momentum.
Raphael
External factors are just an excuse. The plan isn't sustainable.
Michelangelo
Stabilization plans often hurt the poor. What's the real cost?
Raphael
From contraction to 4.6% growth? That's incredible progress.
KittyKat
Inflation down to 2%? That's a miracle by Milei's government.