Economic activity in Argentina sees record fall in April

Buenos Aires — Argentina’s economic activity plunged 26.4% in April, the country’s official statistics agency said on Monday, the worst monthly fall on record as the country reeled from the impact of the coronavirus pandemic and a nationwide lockdown.

The April drop, after the South American grains producer imposed the lockdown in mid-March, was worse than the 21% decline predicted by analysts polled by Reuters, underscoring how badly the pandemic has battered local industry.

Argentina’s government faces a tough balancing act between combating a recent spike in Covid-19 cases and reopening the economy. It has extended a quarantine in and around Buenos Aires but relaxed rules in other parts of the country.

The fall, which followed an 11.5% drop in March, surpassed declines during crises in 2002 and 2009 and was the worst since statistics agency Indec started keeping records in 1993.

Already mired in recession for two years and in default on foreign debts, Argentina is headed for an annual economic contraction in 2020 that organisations, including the International Monetary Fund, have estimated at about 10%.

The worst-hit sectors included construction along with the hotel and restaurant industry, which fell more than 85%, Indec said.

Argentina is meanwhile racing to restructure about $65bn in foreign debt, with a deadline for a deal in late July after talks stalled earlier this month, despite the government and creditors having edged close to a deal.

The country’s bonds rose 1.2% on Monday on hopes that the two sides will bridge their differences in coming weeks.

Argentinian investment services firm Grupo SBS said in a report,  “The debt negotiations continue to move forward as economic indicators remind us that there are more difficult problems to solve along the way.” 

Reuters