The Organization for Economic Co-operation and Development (OECD) has nearly doubled its inflation forecast for Argentina since November. According to its February 2024 Economic Outlook interim report, the organization expects prices in Argentina to soar by 250.6% in 2024, up from its 134.5% forecast in November.

The economy is also expected to shrink by 2.3%, one percentage point more than forecast in November, before rebounding by 2.6% in 2025, according to the report published on Monday morning.

“High inflation and sizable fiscal tightening are projected to result in an output decline in Argentina in 2024 before growth recovers in 2025 as reforms start to take effect,” the report noted. Its inflation forecast for 2025 is 64.7%.

Argentina’s inflation rate for 2023 hit 211.4%, the country’s highest interannual price hike since 1990. It was also the highest 2023 inflation rate in Latin America, surpassing Venezuela’s, which was 193% according to the Venezuelan Finance Observatory.

The Consumer Price Index sped up towards the end of the year, more than doubling to 25.5% in December as the incoming government stripped away price controls and the impacts of tax cuts in the run-up to the election made themselves felt. Prices continued to soar in January — data for the month will be released on February 14.

Overall inflation in the G20 this year is seen rising in 2024 — but this is because high expected inflation in Argentina and Turkey pushes the average up, the report’s authors note. Without these two countries, it would fall from 3.6% in 2023 to 2.6% in 2024 and 2.4% in 2025. They blame the high inflation in both countries on “loose macroeconomic policy settings in the past.”

Last week, the International Monetary Fund (IMF) economic outlook forecast a 2.8% economic contraction in Argentina, similar to the OECD’s expectations. However, the pair differ on inflation: the IMF expects the index to fall to 150% this year.

Overall, the OECD sees global growth easing slightly from 3.1% in 2023 to 2.9% this year. Countries are expected to wrest inflation back under control by the end of 2025, but it notes that geopolitical tensions constitute an economic risk — especially if conflict in the Middle East affects energy prices.

The OECD (Organization for Economic Cooperation and Development) is an international group of 38 mostly European and North American countries which is informally known as the global rich countries’ club. Its headquarters are in Paris.

When President Javier Milei was inaugurated on December 10, incoming Foreign Minister Diana Mondino announced that Argentina was accepting an invitation to start the process of joining the OECD. The accession process typically takes years.