Moody’s Notes Inflation Deceleration in Argentina, Lifts Regional Forecast
Argentina’s growth outlook outpaces the regional average, making it the year’s “positive surprise,” despite ongoing currency pressures.
Quick overview
- Moody's has revised its 2025 growth projections for Latin America, raising the regional GDP growth forecast from 2.1% to 2.2%.
- Argentina's new president, Javier Milei, is credited with financial stabilization and a significant decline in inflation, contributing to a positive growth outlook.
- The agency projects Argentina's GDP to grow by 5.2% in 2025, despite ongoing currency pressures and reliance on external financing.
- Key risks include the upcoming October legislative elections, which could impact economic policy significantly.
The credit rating agency revised upward its 2025 growth projections for Latin America.
Moody’s highlighted Argentina’s decelerating inflation so far this year and improved its outlook for the rest of the region in terms of GDP growth.
On Monday, the agency released its Latin America Economic Outlook, raising its December 2024 forecast for regional GDP growth from 2.1% to 2.2%, after the economy expanded 3.1% in the first quarter.
For Argentina, Moody’s underscored “financial stabilization” and the sharp decline in inflation since last year, noting that although the economy still faces challenges, this “solid recovery” could extend through 2026, supported by improvements in inflation, employment, and fiscal accounts.
Among key risks, the agency pointed to the October legislative elections as a potential turning point, warning that an unfavorable outcome for the government could have “significant consequences” for economic policy.
Still, Argentina’s growth outlook outpaces the regional average, making it the year’s “positive surprise,” despite ongoing currency pressures and dependence on external financing.
Argentina GDP to Grow 5.2% in 2025, Inflation Above 40%
Looking ahead, Moody’s projects Argentina’s GDP to expand 5.2% in 2025, before moderating to 3.5% in both 2026 and 2027.
Annual inflation is forecast at 40.8% in 2025, falling to 23.7% in 2026, while interest rates are expected to close at 30.5% this year and 23.5% in 2026.
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