According to the latest paper published today by the International Monetary Fund (IMF), the gross domestic product (GDP) in Argentina is set to grow by 4.2% in Argentina in 2012, down from 8.9% last year. Inflation is predicted to reach 9.9% this year, up from 9.8% in 2011.

“The strong credit growth and the high levels of inflation are causes for concern,” the report states.

Presenting the paper called Global Economic Prospects, the IMF adviser Thomas Helbling warned the Argentine government that nationalisations made the country unpredictable and were harmful for their economic growth.

“There has been a certain deterioration in the investment climate in the past years,” Helbling said. “State investments make the investment climate even worse, they make it unpredictable, which is harmful for investment and growth.”

The paper said that it used the official Argentine statistics for the growth predictions but reported that private analysts provided extra information which showed a lack of reliability in the official numbers.

“The technical personnel in the IMF is also using other indicators of GDP growth and inflation… which include estimates from private analysts that have shown a real GDP growth that is significantly lower than the official figures indicate,” the report stated, “and information put together by provincial offices of statistics and private analysts that have shown a rate of inflation that is considerably higher than official figures indicate.”

The fund went on to say that although food supply was growing at a good pace, the meteorological phenomenon La Niña did present a big worry for market operators due to its unpredictable effect on the main agricultural zones.

“Soy is the crop that runs the greatest risk, mostly because the production is concentrated in Argentina and Brazil,” the paper continued.

According to the IMF, the country that should experience the biggest growth in Latin America is Peru, which is predicted to see a 5.5% increase in its GDP this year.