inflation of 30.5% in 2019 and recession until 2020 in Argentina

The International Monetary Fund (IMF) has estimated that the Argentine economy is expected to shrink by 1.2% in 2019 with an inflation rate of 30.5%, which is why it believed it was essential for the economy to grow. achieve the zero deficit this year "in order to boost investor and investor confidence.

In its report on the outlook for the global economy presented today in Washington before the IMF and World Bank Spring Meetings, the agency has slightly improved the performance outlook for the world economy. Argentine economy.

Last October, it had estimated an economic contraction of 1.6% of gross domestic product (GDP), while in the text published today, the decline was reduced to -1.2% and that for 2020 , a way out of the recession was expected. 2.2% growth.

On the price side, the IMF has raised its inflation forecast by 10 points to 30.5% this year. During the same period, he estimated a price increase of 20.2% in December (December). from 2019 to December 2018).

"Inflation expectations remain high as Argentina adjusts to a new anchor regime in a renewed monetary framework," said the IMF, calling the process "temporary effect" remarkable".

Regarding the level of activity, "Argentina's economy is expected to contract in the first half of 2019 due to slowing domestic demand, due to stricter policy aimed at reducing imbalances, and that it will resume in the second half of the year as real disposable income and agricultural production recover, following the drought of last year, "said # 39; agency.

For the IMF, "higher nominal wages and upward inflation expectations will generate more persistent inflationary pressures in 2019 compared to those projected in the WEO of October 2018". Meanwhile, unemployment would rise to 9.9% this year, compared to 9.2% estimated in 2018.

Similarly, the entity that runs Christine Lagarde expects a current account deficit of 2% for 2019, which is expected to widen to 2.5% next year.

The IMF warned that "the risks to the economy remain considerable" and that its "materialization could result in a change in investor preferences relative to peso-denominated badets and put pressure on the currency and the money market". capital "argentine.

In this context, the agency recommended that "the continued implementation of the stabilization plan as part of the IMF-supported economic reform program is crucial to enhance investor confidence and restore sustainable growth that raises everyone's standard of living. " segments of society ".

To this end, "it is essential to meet the target of a primary fiscal balance of zero in 2019 and 1% of GDP by 2020 to reduce financing needs and avoid reigniting tensions on liquidity. "he said.

"The continued achievement of monetary objectives will be crucial in re-anchoring inflation expectations and restoring the credibility of the Central Bank," the IMF said, adding that "the resumption of the structural reform agenda" was necessary in the country.

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