Argentina’s economy is likely to contract 12.5% in 2020, a central bank survey of economists showed on Friday, a slightly more negative outlook than a month earlier as the impact of the coronavirus pandemic hammers the South American nation.
The economic outlook in the monthly report polling 44 economists was down from a 12% estimated drop previously.
Economists predicted a larger fiscal deficit of around 2 trillion Argentine pesos ($27.49 billion) as the government steps up spending to reignite the economy after two years of recession and to recover from COVID-19.
Those polled forecast a deeper contraction in the second quarter, but had a more positive outlook for the third quarter, “indicating that the period of greatest impact of the pandemic has already been overcome,” the report said.
Argentina has registered 235,677 confirmed infections of COVID-19, with daily cases accelerating in recent weeks as the country has looked to ease some lockdown restrictions in place in and around Buenos Aires, the capital.
The country, which defaulted in May, reached a deal with creditors this week to restructure $65 billion in foreign debt.
The central bank survey also estimated inflation for 2020 at 39.5%, slightly down from its month-earlier forecast. The peso currency was seen rising to 86.4 pesos per dollar in December 2020 and 123.2 pesos per dollar in December 2021.