The news that Argentina has started talks with the IMF over a full-blown bailout has masked the fact that – deal or no deal – the economy is likely to fall into recession this year. We now expect GDP to contract by 0.5% this year (vs. growth of 2.5% previously). We’ve also revised down our 2019 growth forecast from 3.2% to 1.5%. These forecasts are well below the consensus, but the risks lie to the downside.
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