new york april 25 reuters  argentinas peso tumbled to a record low in the popular black market as an election buildup sows uncertainty and the economy shows strains beyond the countrys allimportant grains exports hit by a crippling drought the peso hit an alltime low of 460 per dollar on monday in a black market that has flourished as the official foreign exchange market is under tight controls that is down from 400 pesos per dollar just a week ago and compares to the official spot rate of around 220 mondays 46 daily decline was the largest in nine months the gap between the black and official rates of more than 107 is the widest since august last year the pesos slump puts more pressure on alberto fernandezs government to devalue the currency also lifted by central bank intervention that in march alone amounted to more than 1 billion devaluation rumors have abounded in argentina ever since fernandez became president yet against what economic logic would suggest it has not happened said carlos de sousa em debt strategist and portfolio manager at vontobel asset management id be very surprised if this government devalues the official exchange rate before the presidential election but its probably one of the first things the next government will do fernandez said last week he will not run for reelection in october which could give him cover to enact a very unpopular move that would exacerbate inflation already running above 100 annualized data on monday showed monthly economic activity was flat in february even as it expanded 02 annualized while last week the trade balance posted a surprise 11 billion deficit further pressuring the currency despite activity edging up in january and holding steady in february in our assessment the sharp slowdown in activity seen at the end of 2022 is set to continue said goldman sachs sergio armella in a note to clients on monday a bad harvest tight fx and import controls and headwinds from the very high inflation and growing macroeconomic imbalances and distortions should keep real activity data weak through 2023 economic activity is set to contract 23 this year the worst performance among the g20 countries with inflation seen ending the year above 100 according to median estimates from economists polled earlier this month the weak data has further muddied the waters in buenos aires as the peso has slumped rumors have circulated about political pressure rising on economy minister sergio massa and central bank chief miguel pesce forcing officials into denials and public shows of solidarity argentinas economy has struggled to build its dollar reserves as agriculture exports have dropped to the point that the international monetary fund lowered an already low bar for reserves set as part of a 44 billion financing program jpmorgan said on friday argentina also failed its imf program primary fiscal target for endmarch and said the government will request a formal waiver from the fund but also likely a relaxation of the annual 19 of gdp primary deficit target for 2023 in the upcoming review talk of a peso devaluation came back to the fore but the near term impact on already high inflation makes it political suicide ahead of presidential elections a devaluation will come at the expense of pushing up inflation even further in the nearterm but is needed to restore external competitiveness and help argentina run the current account surpluses it needs to rebuild its fx reserves said kimberley sperrfechter latin america economist at capital economics in a note it is clear she wrote that the peso is fundamentally misaligned reporting by rodrigo campos additional reporting by shreyashi sanyal editing by adam jourdan and sonali paul