Recovery In Argentina's Consumer Spending, But Risks Remain

• The outlook for Argentinean consumer spending over 2021 is one of a gradual recovery, with household spending to post real growth of 10.2% y-o-y. This marks the beginning of a recovery from the -13.7% y-o-y contraction in household spending estimated over 2020, as a result of the COVID-19 pandemic.
• High consumer price inflation will remain one of the main constraints for consumer spending in the country. Whilst inflation was at its highest in 2019, averaging 53.6% for that year, it is forecasted to remain elevated in 2021, with an average of 42.1% projected, slightly down from the 42.7% estimated in 2020. 
• Notably, Argentina had some of the most stringent restrictions in Latin America throughout 2020. This has continued into 2021, with authorities remaining cautious as a new variant (the Brazil variant) emerges in the region.
• Fitch Solutions notes that the vaccination program has also been gradually gaining momentum since the start of the year, with Argentina receiving shipments of vaccine doses which will help support the consumer recovery outlook that will help to drive the economic rebound. 

(Source: Fitch Solutions)