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LatinNews Daily - 01 June 2021

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In brief: OECD warns of factors slowing Argentina’s recovery

* The Organisation for Economic Co-operation and Development (OECD) has released its latest Economic Outlook report, in which it projects that Argentina’s GDP will grow 6.1% this year, having contracted by 9.9% in 2020 as a result of the economic crisis caused by the coronavirus (Covid-19) pandemic. The OECD’s projection is broadly in line with forecasts from other institutions; the organisation notes that new mobility restrictions imposed in April in response to a strong second wave of Covid-19 infections are slowing the recovery, while “rising macroeconomic imbalances” also limit the pace of recovery. “Risks to the outlook are tilted to the downside and include a disorderly unwinding of macroeconomic imbalances”, the OECD warns in its report, adding that the acceleration of the vaccination process would help limit the setbacks to the fight against Covid-19. Other steps which would help rekindle confidence and spur the recovery include “prudent fiscal policies, less monetary financing of the deficit, strengthening the credibility and independence of the central bank, and eventually a removal of foreign exchange controls”.