The banking sector accumulated a 46% lower gain in the first four months of 2020 than in the same period of 2019. In financial intermediation, the banks lost, and this year they are failing again. The credit part is dead, and the liability rates have the floor, so the margin is not right. The gain comes from trading and the difference in the exchange rate.
The Ministry of Economy will seek today to place 90 billion pesos ($1.25 bn) in a tender for Ledes, Boncer and a fixed rate bond at 22%, to refinance about 86.5 billion pesos ($1.2 bn) that expire next Friday.
In the first half of 2020, Argentina recorded a trade surplus of $8.097 billion, which meant a growth of 44.8% compared to the same period but in 2019. Exports fell by 11% and imports collapsed by 23.3%, affected by the fall in economic activity. The decline in imports explained by a lower purchase of capital goods such as machines, electrical appliances, nuclear reactors, or mechanical devices, land vehicles and fuels. On the side of exports, the most significant fall verified in the sales of land vehicles.
78.6 per cent of tax collection at the three levels - nation, province and municipalities - is for the production and transaction of goods and services, while the remaining 21.4 per cent comes from taxes linked to income and wealth. The public sector is one of the largest payers of the levies contained in goods and services. Indirectly, the government is affected by the consequences of the system's regressivity. It is because, by modifying the purchasing power of the lower-income strata, the government has to implement social plans and compensatory subsidies (transfers).
The risk rating agency Standard & Poor's (S&P) announced yesterday the downgrading of two Argentine bonds in foreign currency to "D", from "CC", and left them in default because the government did not cover the maturities of these securities that are part of the debt renegotiation.
The General Activity Index (GAI) showed that the economy recovered by 1.9% in June compared to May. In the year-on-year comparison, activity showed a 10.6% drop, below April (20%) and May (15.7%) collapses. The most critical loss was in the construction sector, which collapsed by 30.6%; and trade which contracted by 15.4%.
An Oxfam report indicated that, since March, eight new billionaires appeared in the region against estimates that 52 million people will go into poverty and 40 million will lose their jobs this year.