NEW YORK: The International Monetary Fund slashed its 2024 economic growth projection for Argentina to a 2.8% contraction from a 2.8% expansion, dimming its view on output growth in Latin America as a whole as part of the fund’s World Economic Outlook update on Tuesday.

For Latin America and the Caribbean region, the IMF sees gross domestic product growth of 1.9% this year, 0.4 percentage point below the October estimate, even if the fund expects output growth in both Brazil and Mexico, the area’s largest economies by far, to be slightly higher than three months ago.

“The (Latin America and the Caribbean) forecast revision for 2024 reflects negative growth in Argentina in the context of a significant policy adjustment to restore macroeconomic stability,” the fund said in a statement.

Yet on Friday, Argentina’s new government withdrew major spending reforms from a sweeping bill in Congress to facilitate its approval while stressing a pledge to eliminate the budget deficit.

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The 5.6 percentage point downgrade to Argentina’s growth estimate is by far the largest of the IMF’s outlook update.

Brazil is seen expanding its economic output by 1.7% this year, 0.2 percentage point higher than the view three months ago, while for Mexico the new 2.7% projection is 0.6 percentage point higher than in October.

Growth in emerging market and developing economies overall was expected to come in at 4.1% in 2024, up from a 4.0% growth view late last year.