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Argentine economists forecast deeper recession, hold inflation steady

Credit: REUTERS/Agustin Marcarian

Argentine economists forecast a deeper recession and maintained a pessimistic inflation forecast at a shade under 55% in the latest central bank monthly poll of analysts released on Wednesday.

By Aislinn Laing and Lucila Sigal

BUENOS AIRES, Oct 2 (Reuters) - Argentine economists forecast a deeper recession and maintained a pessimistic inflation forecast at a shade under 55% in the latest central bank monthly poll of analysts released on Wednesday.

The prediction follows weeks of political uncertainty and a plunge in the value of the peso after Alberto Fernandez, a Peronist candidate, soundly beat market-friendly incumbent President Mauricio Macri in an August primary election.

Macri's government last month sought to halt the slide by announcing currency controls and sought an extension of the maturities of about $100 billion in debt.

Inflation was seen at 54.9% for the year, according to the survey of 45 analysts, down from 55% in the same central bank poll which was released last month, shortly after the shock primary election result. It will ease to 40.5% by 2020, the analysts said.

The new weakness in the peso, which lost around half its value against the U.S. dollar last year, is expected to lead to rising consumer prices over the months ahead.

Gross domestic product was forecast to shrink 2.9% this year, the poll said, versus 2.5% the previous month's survey.

This week, Fernandez moved to reassure investors, saying that if elected he would aim to avoid reductions on bond payments and seek a moderate "Uruguay-style" debt restructuring.

(Reporting by Aislinn Laing and Lucila Sigal in Buenos Aires Editing by Matthew Lewis)

((aislinn.laing@thomsonreuters.com; +56 998188538))

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