Argentina expects the economy to contract 6.5% in 2020 due to the Coronavirus pandemic

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BUENOS AIRES (Reuters) – Argentina has cut its economic forecast for 2020 sharply due to the Coronavirus pandemic, according to a government analysis that expects the economy to contract by 6.5 this year as activity falters due to lockdown measures in the country and weak global demand.

The government had forecast in March that the economy would contract between 1.0% and 1.5%.

In its latest estimates, the Economy Ministry predicted on Tuesday that growth in 2021 will reach 3 percent, unchanged from its previous forecast in March, which did not include the repercussions of the virus outbreak.

The new projections indicated that the South American country is likely to post an initial budget deficit of 3.1 percent of gross domestic product this year, up from previous expectations of between 1.1 percent and 1.5 percent.

Argentina, the third largest economy in Latin America, has been in recession since 2018 and faces arduous negotiations this month with private creditors to restructure foreign debt worth about $ 65 billion.