Argentina Economic Forecast: Argentina Economic Growth To Rebound In 2017

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Argentina Economic Forecast: Argentina Economic Growth To Rebound In 2017

Argentina economic growth is expected to rebound in 2017 and 2018 due to the recent reforms and economic changes policies that the government has implemented that gains traction. Inflation remains high in the country but is also expected to decrease to the central bank’s target focusing on widening economic slack.

According to Post Online Media, Argentina economic growth will reduce the unemployment rate from the current rate of 8.5 percent. The high growth serves as a sign that the economy is expanding in the fourth quarter following a prolonged recession.

In the record, Argentina economic growth fell to 0.1 percent in December last year and closed down to 2.3 percent compared to the rate in 2015. The government’s top priority is to rebuild confidence in the microeconomic policies.

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The changes and reform of the national statistics agency as improved the country’s credibility. It also enables the central bank to introduce inflation targeting which greatly helps promote Argentina economic growth.

In early 2016, interest rates were increased which lead to inflationary and exchange rate pressures. The monetary policy remains restrictive, but should progressively loosen as the inflation declines to ensure Argentina economic growth.

According to OECD, the government has a limited fiscal space to improve Argentina economic growth through their monetary expansion. Moreover, the budget deficit remains prominent, and the cost of borrowing is still high. The government welcomes the idea of implementing fiscal consolidation but must be gradual to reduce the associated social costs.

Inclusive growth through improvements in education and well-targeted social transfers is being encouraged to ensure Argentina economic growth. Furthermore, the tax system should become more efficient to reduce fiscal pressure on firms.

Productivity and Argentina economic growth are possible if there would be a shifting on government spending towards public investment and increasing competition among businesses. This is possible if the government will reduce barriers to trade, investment, and entrepreneurship.

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Published at Wed, 01 Mar 2017 03:03:00 +0000

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