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ECONOMY | 01-05-2020 12:46

Argentina's economy to contract by 6% this year, says Moody's

International rating agency forecasts 6% contraction in GDP due to impact of the coronavirus pandemic. Previously, it had projected a 2.4% drop in activity.

Moody's Investors Service has predicted that Argentina's economy will contract by six percent in 2020, as a result of the coronavirus pandemic and the accompanying shutdown in economic activity.

In a previous report, Moody's had forecast a 2.4 percent slump in GDP this year.

The figure is deeper than most forecasts. According to an estimate from the World Bank, economic activity will suffer a 5.2 percent fall this year. The International Monetary Fund (IMF) anticipates a contraction of 5.7 percent. 

Moody's warned in a report that Argentina would be hit harder than most nations, though it highlighted that strict measures of social distancing had allowed the authorities to "flatten the curve" of Covid-19 infections.

The agency cut its economic forecasts for all the countries that make up the G20, adding that the group's developed nations would see average shrinkage  of 5.8 percent, higher than those of the emerging countries, which together would reach 3.5 percent.

"The economic costs of the coronavirus crisis in the midst of the near paralysis of the world economy are rapidly accumulating," the ratings agency warned.

Moody's projected a gradual recovery of the economies of G20 nations by 2021, adding that by that year real GDP in most economies will be "below pre-virus levels.”

- TIMES/NA

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