IMF estimates that the Argentine economy will fall 5.7% in 2020

According to the Fund report, the world economy will contract approximately 3% in 2020 as a result of the COVID-19 pandemic

The Argentine economy will have an average drop of 5.7% of GDP in 2020, similar to the average of the forecasts of the countries of South America, which as a whole will fall 5% for the same period, due to the global economic impact due to the Coronavirus pandemic, according to estimates on Tuesday by the International Monetary Fund (IMF).

The Fund revealed its projections of the world economy through the presentation of its traditional semi-annual World Economic Outlook report, called “The Great Isolation” (this year the original title is The Great Lockdown, which refers to the isolation and stoppage of the economy world).

This is due to the classic Spring meeting that it organizes together with the World Bank, which for the first time will be entirely virtual, due to the circumstances imposed by the pandemic.

In the report, the IMF states that the main economy in the region, Brazil, will fall 5.3%, while Chile will do so by 4.5%, just like Peru.

Meanwhile, Uruguay will drop 3%, while the remaining Mercosur partner, Paraguay, would barely drop 1%, being one of the least hit in the region.

The report presented by the entity’s chief economist, Gina Gopinath, warned that due to the circumstances in which a turnaround in the world economy is expected towards a recession of the order of 3%, the full report of the agency will be released only in May , since the current one contains a smaller extension than usual, and a quantity of raw data.

As an example, the annual projections (December versus December) of the countries of the region are not published, which is the statistic against which the Fund’s annual data is compared with that of Indec, with respect to GDP and price estimates. , among others.

In particular for Argentina, the estimate of a drop in GDP of 5.7% is expected to be the one referred to the average for the year, and the same is true for 2021, when the local economy is expected to recover by 4 ,4%.

It was also observed that for the Argentine case, estimated data on average annual inflation and the current account of the country, among others, did not appear, something that was analyzed for other countries in the region.

When asked about it, an IMF spokesperson told Télam that “due to the ongoing debt negotiations with private creditors, the fiscal, debt, debt service (domestic) projections are excluded from the April 2020 edition of the WEO. or external) and inflation “.

“Once the process has concluded, the publication of these variables is expected to resume,” he said, referring to countries such as Lebanon, which recently declared in default and of which the Fund foresees a recession of -12%, is in a similar situation.

Regarding the level of unemployment, the Fund foresees for Argentina that it will rise by 1.1 percentage point and would be at 10.9%, when in Brazil the unemployment rate will climb to almost 15%.

The impact of the Covid-19 is so great that just four months ago, last January, when a WEO update was made, the IMF believed that the world economy was going to grow 3.3%, when now it is expected that the global economy will will precipitate 3%.

“It is very likely that this year the world economy will experience its worst recession since the Great Depression, beating what was seen in the financial crisis a decade ago; The Great Lockdown, as you might call it, is projected to reduce global growth dramatically, “Gopinath prevented.

He continued that, by 2021, the recovery will remain “below the pre-virus trend, with considerable uncertainty about the strength of the rebound.”

Gopinath called for “international cooperation” on at least two issues: on the one hand, in addition to sharing equines and experience, he asked that “a global effort must ensure that when therapies and vaccines are developed for Covid-19, both rich and poor nations have immediate access. “

He also stated that “the international community will also need to intensify financial assistance for many emerging markets and developing economies; and for those facing large debt repayments, a moratorium or debt restructuring may be necessary”, not without first affirming that “this crisis is like no other.”

For its part, the world’s largest economies such as the Eurozone and the United States will suffer a sharp turnaround due to the isolation of 7.5% and 5.9%, respectively, something unthinkable just three months ago.

Among the list of most hit countries on the planet are Greece (-10%), Italy (-9.1%) and Spain (8%), among others.

In contrast, China and India are among the few countries in the world that will grow in 2020, with an expected GDP increase of 1.2% and 1.9%, respectively.

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Written by Argentina News

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