MercoPress. South Atlantic News Agency

Argentine economy forecasted to expand 5,5% this year, but inflation will remain close to 50%

Economy minister Martin Guzmán announced on Friday during a visit to the oil rich province of Neuquén that inflation this year will reach 35%.

Argentina's economy is expected to grow 5,5% in 2021, after a contraction of about 12% last year due to the COVID-19 pandemic, with inflation seen ending the year at 49.8%, according to a survey of economists by the central bank released on Friday.

According to the Market Expectations Survey (REM) of the central bank, based on opinions of 42 specialists, it is estimated that the first half of 2021 will end with accumulated inflation of 21.8%.

The survey participants see the average nominal exchange rate in Argentina will reach 125.8 pesos per dollar by December 2021 and 171.45 pesos per dollar by the end of 2022.

Regarding foreign trade, exports this year are estimated to reach US$ 59,959 million and imports, US$ 48,147 million. Finally a delicate item jobs and unemployment are expected to range in 2021 at the fourth quarter figure 11,7% with a peak of 12% in the second quarter.

The survey was carried out between Dec. 23 and 30, the bank said.

However some of these estimates collide with those from Economy minister Martin Guzmán which he announced on Friday during a visit to the oil rich province of Neuquén. Guzmán was insistent that inflation this year will reach 35%.

“The main task of government this year in economic issues is to calm the Argentine economy and markets, which will require the consensus of the private and public sectors, working jointly,” Guzmán said.

“It is crucial that we bring down inflation sustainedly; this year, 2020, we estimate in the range of 35%, and hopefully we can keep the trend of lowering it five percentage points annually,” and this will demand a consistent fiscal policy.