Developments in individual OECD and selected non-member economies

摘要

When the COVID-19 pandemic hit Argentina, the economy was already in recession and uncertainty was high, in particular regarding the restructuring of the high public debt. While the timely containment measures mitigated the spread of the virus, they reduced production capacity and domestic demand. With the gradual lifting of the lockdown, domestic demand will recover, but remain subdued due to higher unemployment and lower household incomes. A significant rebound of investment will depend on a successful restructuring of public debt. GDP is projected to fall by around 10% in 2020 in the event of a second virus outbreak and another dip in economic activity later in the year (the double-hit scenario). If this does not occur, a faster recovery is possible, with GDP declining by around 8Va per cent in 2020. Bold and timely measures have been undertaken to contain the pandemic and support households and firms, and should be repeated in event of a second outbreak. Without access to financial markets, the central bank is contributing to the financing of the fiscal deficit, which puts additional pressures on inflation and the exchange rate. A successful restructuring of the high public debt would alleviate these pressures, but further efforts might be required to strengthen the sustainability of public finances. Improvements in public spending efficiency should be the main tool to achieve this, supported by a thorough cost-benefit evaluation of special regimes, exemptions and loopholes in the tax system. Maintaining and extending the conditional cash transfer programme is key to reducing poverty and providing a social safety net for households depending on informal work.