OECD: Argentina's Growth Forecast For 2017 GDP Rises To 2.9% From 2.5%

(RTTNews) - The Organization for Economic Cooperation and Development (OECD) raised its forecast for Argentina's Gross Domestic Product (GDP) growth in 2017 to 2.9%, from 2.5%, and from 3.1% to 3.2%, in 2018.

The OECD noted that the recovery is gaining momentum and extending to more sectors, such as agriculture, construction, manufacturing, and distribution. The decline in inflation and the tight monetary policy are favoring households' purchasing power and boosting consumption, said the report.

Meanwhile, the Argentinean central bank's monetary policy should appropriately keep its restrictive tone to lower the current two-digit inflation, said the OECD.

Investment should continue to be supported by the promotion of infrastructures, a better climate for business and increasing capital inflows.

In OECD's assessment, growth and employment in Argentina should benefit from broad-spectrum structural reforms, including a comprehensive fiscal reform that simplifies the tax system and improves progressively.

Finally, the entity foresees that economic activity should be consolidated based on the strength of domestic demand.

"Investment will be a key driver of growth in 2018 and 2019, driven by infrastructure investments, while other catalysts will be an improved business climate and increased foreign investment flows," the report said.