World Bank Cuts Argentina Growth Forecast to 2.1%

The World Bank has revised its growth forecast for Argentina to 2.1% in 2026, down from the 3.6% predicted in June. Despite the lower growth expectation, the lender still anticipates three consecutive years of expansion, marking the first time Argentina has seen this in nearly two decades. For US investors holding Argentine dollar bonds, the outlook is mixed, as the bank acknowledges the fiscal discipline that has reduced country risk.

The report, published on October 6, 2026, outlines the shift of energy subsidies away from wealthier households as a key factor in the turnaround. The World Bank's Latin America and the Caribbean Economic Update, released on the same day, highlights Argentina's "decisive fiscal-led adjustment" from a large deficit in 2023 to a primary surplus and an overall fiscal balance.

Tighter spending, reductions in waste and administrative inefficiencies, and the repurposing of energy subsidies have helped anchor inflation expectations and compress sovereign risk. The bank also cites upgrades from major credit rating agencies, such as S&P, Fitch, and Moody's, as contributing to the reduced risk. While the 2026 growth forecast is weaker than previously anticipated, the bank maintains its outlook for 2027 and 2028, projecting 3.0% and 3.5% growth, respectively.

The report notes that Argentina's real output in 2027 is expected to be 9.9% higher than its 2024 level, which was still 0.4% smaller than in 2011. The strategic framework launched by the United States and Argentina in February 2026 to support critical-mineral supply chains is also mentioned, with a pipeline of US$186.5 billion in investments, including US$49.8 billion approved and US$136.7 billion under evaluation.