Argentina’s economy is forecast to grow 2.8 percent in 2026 despite a worsening global outlook, according to an updated projection by the Organisation for Economic Co-operation and Development (OECD). In its latest report – ‘Under Pressure’ – the Paris-based organisation warns that the conflict in the Middle East is set to slow world growth and fuel inflation through higher energy and fertiliser costs. As a result, the OECD has cut its global growth forecasts, stating that the economic consequences of the war involving the United
States, Israel and Iran would continue to be felt well beyond any eventual ceasefire. The OECD now expects global growth to slow from 3.4 percent in 2025 to 2.8 percent in 2026 if disruptions remain limited. A more prolonged conflict could reduce growth to as low as 2.1 percent next year, below projections published in March. “The energy shock stemming from the conflict in the Middle East is real and severe,” OECD Secretary-General Mathias Cormann said while presenting the report. “It is generating higher costs
and greater uncertainty for households and businesses around the world.” The organisation said the closure of key energy shipping routes and disruptions to global supply chains have increased pressure on commodity markets, particularly oil and fertilisers. Latin America outlook For Latin America, the direct impact is expected to be less severe than in Asia or the Gulf region, which depend more heavily on Middle Eastern energy imports. However, OECD economists warned that rising fertiliser prices could eventually feed through to higher food production costs and
consumer prices across the region. The report left Argentina’s 2026 growth forecast unchanged at 2.8 percent, while slightly upgrading Brazil’s outlook to 1.6 percent and cutting Mexico’s projection to 1.3 percent. Among the world’s major economies, India is expected to remain the fastest-growing large economy with growth of 6.3 percent, ahead of China at 4.5 percent. The United States is projected to expand by two percent, while the eurozone is expected to grow just 0.8 percent. Spain is forecast to outperform its European peers with
growth of 2.2 percent, compared with 0.7 percent in both Germany and France. The OECD also expects inflation across the G20 economies to rise from 3.4 percent in 2025 to four percent in 2026 before easing again in 2027 as energy and food prices stabilise. Against that backdrop, the organisation urged governments to reduce their dependence on imported hydrocarbons, diversify energy supplies and remain cautious with fiscal support measures. It also called on central banks to remain vigilant against broader inflationary pressures. Argentina assessment In
its report, the OECD predicted that Argentina’s GDP will grow 3.5 percent next year, driven mostly by exports from the energy, mining and agricultural sectors. The assessment was generally positive, with OECD officials noting that “private investment is benefiting from an increasingly favourable business environment.” They warned, however, that “private consumption growth will remain modest, limited by high interest rates and a slow recovery of real wages.” The OECD praised President Javier Mieli’s government for increasing reserve accumulation at the Central Bank and predicted that
the recently passed labour market reform, “once implemented, will support formal job creation.” It further called for the elimination of “distortive taxes,” a “broadening” of the tax base and “simplification” of the tax system. “Phasing out inefficient subsidies, raising public-sector efficiency and replacing distortionary taxes with broader income and consumption taxes would strengthen macroeconomic stability. “Eliminating remaining natural gas subsidies, while providing support to low-income households, would provide market signals to steer resources towards alternative energy sources in the longer term,” said the OECD. Critical
minerals Earlier in the week, OECD officials said there is a major opportunity for Latin America as global powers seek alternatives to China for the supply of critical minerals essential to the energy transition and the expansion of digital technologies. Speaking at the OECD’s 18th International Economic Forum on Latin America and the Caribbean in Paris, Cormann said the region was uniquely positioned to benefit from the reorganisation of global supply chains. “The world is offering Latin America and the Caribbean an unprecedented opportunity,” he
said. “Demand for critical minerals is growing and the region has exactly what global markets need.” Argentina features prominently in that strategy. Alongside Bolivia and Chile, it forms part of the so-called Lithium Triangle, home to some of the world’s largest reserves of the battery metal. The country is also attracting growing interest from the United States and European nations seeking to secure supplies of strategic minerals outside China. Brazil, meanwhile, holds more than 20 million tonnes of rare earth reserves, according to estimates from
the United States Geological Survey, making it second only to China globally. Chile and Peru are major copper producers, while Cuba is an important source of cobalt. – TIMES/AFP/NA
OECD, Under Pressure, global growth, inflation, Middle East conflict, energy shock, fertiliser costs, Argentina forecast, Javier Milei, labour market reform, reserves, critical minerals, Lithium Triangle