Argentina economy to shrink 12% in 2020 as pandemic batters output

Argentine one hundred peso bills are displayed in this picture illustration

Argentina’s economy is expected to contract by 12% in 2020, a monthly central bank poll of analysts showed on Friday, worse than the previous estimate of a 9.4% decline, as output is ravaged by measures to tame the coronavirus outbreak.

The central bank poll of 41 analysts projected that inflation will be 40.7% this year. Prices are expected to have risen 2% 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 $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 U.S. 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.

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