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Macro Scenario – Argentina: Debt restructuring is no guarantee of a brighter outlook

August 6, 2020

The next stop is a renegotiation with the IMF


For the version with all charts and tables, please open the attached pdf file


Argentina reached an agreement on the debt restructuring with the three main groups of creditors, paving the way to exit default. The next stop is a renegotiation with the IMF, which will likely require a fiscal consolidation plan and less reliance on central bank financing.

The economic recovery has been modest so far, given the slow reopening. We revised our GDP forecast for this year down to -12.7%, from -10.9% previously. The toll on tax collection and the need to extend social subsidies for longer led to an upward adjustment of our primary fiscal deficit forecast, to 6.8% of GDP (from 6.0% previously).

The monetary financing of the budget deficit feeds inflation expectations and puts additional pressure on FX markets. Given that a successful debt renegotiation is unlikely to attract fresh capital inflows, exchange rate controls may continue to intensify.

Juan Carlos Barboza
Diego Ciongo
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For the version with all charts and tables, please open the attached pdf file



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