The Organization for Economic Co-operation and Development (OECD) released its second annual outlook booklet on December 1st. The report predicts that inflation rates will decline in G20 countries in 2026 and 2027, primarily due to Argentina’s efforts to curb inflation.
For the facility, Argentina is expected to end 2025 with an annual inflation rate of 41.7%, 2026 at 17.6%, and 2027 at 10%.. As such, next year it is expected that Japan will no longer be the country in the G20 with the highest price increases.
“The initial fiscal consolidation process that began at the end of 2023 was essential to containing high inflation,” the OECD said. The policy, implemented by President Javier Millay, has been highly praised in various countries, as reported by CriptoNoticias, which is urging governments to take similar measures.
Against the backdrop of a difficult legacy of macroeconomic imbalances, Argentina has embarked on an ambitious and unprecedented reform process to stabilize its economy. Reforms are beginning to bear fruit, and the economy is expected to make a strong recovery. Inflation has fallen to levels not seen in years.
Organization for Economic Co-operation and Development.
nevertheless, Fiscal policy will require further adjustment The agency said it was important to remain cautious in the medium to long term while promoting potential economic growth. He also stressed that monetary policy should focus on keeping inflation low.
“Comprehensive tax reform, particularly by eliminating some distortive taxes and expanding the tax base for income and consumption taxes, would improve efficiency and equity,” he noted. Furthermore, it shows that modernizing tax administration has the potential to improve compliance with the Treasury Department.
According to the forecast, Turkiye will become the G20 country with the highest inflation rate in 2026. This is despite forecasting that inflation will fall from 34.5% this year to 20.8% in 2026 and 11.7% in 2027, as seen below.
Brazil and Mexico are also expected to see lower inflation rates.
While general inflation remains strong in some regions, the agency estimates that it will decline in the G20 from 3.4% in 2025 to 2.8% in 2026 and 2.5% in 2027. This includes inflation in Argentina as well as two other Latin American countries in the group.
In Brazil, consumer price inflation is expected to rise from 5.1% in 2025 to 4.2% and 3.8% over the next two years. and, Mexico is forecasting inflation of 3.8% this year, 3.3% in 2026 and 2.9% in 2027..
The OECD suggested that “central banks need to continue to pay attention to changing inflation dynamics” in order to formulate policy.
“While gradual policy rate cuts may continue if core inflation moderates and expectations remain fixed, economies facing price pressure from tariffs may need to be more cautious.”
(Tag to translate) Argentina
