MercoPress. South Atlantic News Agency

Argentina 2019: annual inflation of 55% and economy contraction of 2.7%

Treasury Minister Hernan Lacunza said there were 2.9 million more people living in poverty since 2015. The poverty rate is currently above 35%.

Argentina will finish 2019 at 55% annual inflation, the country’s treasury minister said on Monday, capping off a tumultuous year for Latin America’s No. 3 economy that also saw voters usher in a new leftist government.

The inflation forecast is higher than the government’s previous estimate of 53% in the 2020 budget released in September. Twelve-month inflation was running at 50.5% in October, according to the most recent official data.

Treasury Minister Hernan Lacunza said at a press conference there were 2.9 million more people living in poverty since 2015. The poverty rate is currently above 35%.

The economy is expected to shrink by 2.7% in 2019, slightly more than the estimate in the budget of 2.6%, Lacunza said.

About US$ 28 billion in debt held by private investors and international organizations will mature in 2020, Lacunza said, a key challenge for the country as it looks to stave of fears of a sovereign default.

The question of Argentina’s debt is weighing heavily on the minds of bondholders as they brace for pending restructuring talks with the incoming government of President-elect Alberto Fernandez, who soundly beat conservative incumbent Mauricio Macri in the Oct. 27 elections.

Fernandez’s government, which takes office on Dec. 10, will inherit a roughly US$ 100 billion pile of sovereign debt that needs to be restructured. It includes a $57 billion financing package with the International Monetary Fund (IMF).