Argentina economy to shrink 12% in 2020 as COVID-19 pandemic batters output: Poll

Argentina economy to shrink 12% in 2020 as COVID-19 pandemic batters output: Poll

FILE PHOTO: Protest against the state takeover of agro exporter Vicentin in Buenos Aires
FILE PHOTO: A demonstrator waves an Argentine flag during a protest against the state takeover of agro exporter Vicentin and against COVID-19 quarantine measures in Buenos Aires, Argentina June 20, 2020. REUTERS/Agustin Marcarian/File Photo

BUENOS AIRES: Argentina's economy is expected to contract by 12 per cent in 2020, a monthly central bank poll of analysts showed on Friday (Jul 3), worse than the previous estimate of a 9.4 per cent decline, as output is ravaged by measures to tame the COVID-19 outbreak.

The central bank poll of 41 analysts projected that inflation will be 40.7 per cent this year. Prices are expected to have risen 2 per cent in June, according to the poll.

The poll did find a silver lining, noting that "the expectation of growth for the remaining quarters of 2020 suggest that the effect of the coronavirus pandemic is perceived as transitory."

The grim economic picture comes as Argentina tries to restructure about US$65 billion in debt after defaulting on its sovereign bonds earlier this year. The South American nation is readying a final debt restructuring offer to creditors that could be formally sent to US regulators within days, a government source told Reuters on Friday.

Analysts forecast the average nominal exchange rate will reach 88 pesos per dollar in December 2020 and 122.5 pesos per dollar in December 2021.

Source: Reuters/jt

Bookmark