- JPM economists revise down 2023 GDP outlook to -1.7% vs. -0.5%
- Crop drought, inflation pressures seen affecting activity
Argentina’s economy is facing the prospect of a “hard landing” scenario this year as a crop drought deepens expectations of a larger downturn, according to a note published Monday by analysts at JPMorgan Chase & Co.
South America’s second-largest economy is forecast to contract 1.7% this year versus the bank’s previous forecast of a 0.5% decline. That’s one of the most bearish outlooks for Argentina. Economists surveyed by the central bank in January saw 0.5% growth this year while the government penciled 2% growth into its annual budget.
Argentina's Economy Seen Contracting for Fifth Time in Eight Years
JPMorgan marks down 2023 forecast to -1.7% from earlier -0.5% estimate
JPMorgan economists Diego Pereira and Lucila Barbeito see “stagflation entering a new phase with inflation and growth trends diverging: inflation higher and real growth trending lower,” according to the note.
On top of annual inflation nearing 100%, a historic crop drought is worsening the outlook for key commodity exports that boost activity, tax revenue and central bank reserves. Pereira and Barbeito estimate the top three crop exports — soy, corn and wheat — may fall this year to $36.6 billion of shipments down from $51.6 billion in 2022.
High inflation and worsening harvest expectations are fueling what the economists call a “recessionary environment.”
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