RIO DE JANEIRO, BRAZIL – The World Bank on Wednesday (6) ruled out the risk of hyperinflation in Argentina, where the year-on-year rise in the cost of living exceeds 50%, and considered that an agreement with the IMF will further reduce the prospect.
“I don’t see that risk,” said World Bank chief economist for Latin America and the Caribbean William Maloney at a press conference, when asked about the threat of a rampant increase in consumer prices in Argentina.
“Inflation is indeed around 50% but the government still has some tools to prevent the crisis from deepening. In addition, reaching an agreement with the IMF will anchor expectations by further reducing risk,” he added.
Year-to-date, Argentina’s consumer price index rose 32.3%, according to the national statistics institute Indec, which in September reported a year-on-year 51.4% hike in the cost of living. The figure is one of the world’s highest inflation rates officially measured in the past 12 months.
Preswident Fernández’s government is currently negotiating with the International Monetary Fund (IMF) an extended facilities agreement to replace the stand-by signed in 2018 during Mauricio Macri’s administration, and under which it owes US$44 billion.
In its latest semi-annual report for Latin America and the Caribbean, presented on Wednesday, the World Bank estimated a GDP contraction of 9.9% for Argentina in 2020, with a projected growth of 7.5% in 2021, 2.6% in 2022 and 2.1% in 2023.
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