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ECONOMY | 05-11-2019 14:15

Central Bank alters 2019 forecasts: 3% drop in GDP, inflation at 55.6%

Monthly survey carried out by Central Bank downgrades forecasts for Argentina's economy.

Argentina will close out the year with an inflation rate of 55.6 percent, the Central Bank said Monday, as it issued the results of its latest survey of economists.

That's higher on last month's figure, when analysts predicted that inflation would reach 54.7 percent.

According to the INDEC national statistics bureau, prices increased by 37.7 percent up until September, with data for the final three months of the year still to come.

Private economists consulted by the Central Bank in the survey now see inflation in 2020 reaching 42.9 percent, and 29.1 percent in 2021.

The monetary authority also said Argentina's gross domestic product (GDP) would shrink by three percent this calendar year, a downgrade on last month's prediction of a 2.8 percent contraction in 2019.

In 2018, the economy contracted by 2.5 percent. The International Monetary Fund estimated recently that Argentina would register declines of 3.1 percent this year and 1.3 percent the following year.

Argentines have witnessed a dramatic fall in purchasing power over the last year, as the peso has weakened against the dollar. In the aftermath of August's PASO primaries, the currency depreciated by more than 20 percent against the greenback in less than a week.

"The projection of the analysts of the average nominal exchange rate for November fell to 61.1 pesos per dollar," the Central Bank said in its report, adding it would further weaken "in value in December 2019 to 65 per dollar,"

The Central Bank imposed currency controls on October 28, reducing the amount of dollars limit that Argentines can buy per month from US$10,000 to US$200, in the wake of Alberto Fernández's election win.

– TIMES/AFP

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