Month: July 2020

Mercado Libre will invest another $27 million in Mexico

In the same day, the company received praise from the British weekly The Economist and announced a $27 million investment in Mexico to open a distribution centre similar to the one it has in La Matanza in the state of Jalisco, with a capacity of 60,000 square meters, half of which will be operational in November. Yesterday the share value was parked at $982.30, with a fall of 3.47%, which placed its value at $48.83 billion. Mercado Libre continues to be the Argentine company with the highest valuation in the world.

MercadoLibre is a wannabe Alibaba

The pan-Latin American e-commerce and fintech firm’s market value has doubled to $50bn during the pandemic as it has provided online sales and payments lifelines to vulnerable companies. Since it was founded in it has become the region’s biggest tech darling, even though in 2020 revenues are projected to be just $3.2bn and it will lose money for a third year running. Profit, though, is for the future. Meanwhile, it is part of a wave of digital disruption that may propel smaller firms—which make up about 80% of those using its platforms—into the modern era. Its e-commerce business earns a fee from transactions between buyers and sellers on its platform.

The economy grew 10% in May compared to April, although it fell 20.6% year-on-year

Due to a more significant easing of restrictions, the economy bounced 10% in May compared to April, as reported this Wednesday by the INDEC. However, the Monthly Economic Activity Estimator (EMAE) showed a 20.6% drop compared to the same month in 2019. In the first five months of the year, the EMAE accumulated a fall of 13.2% compared to the same period last year. In April, the economy had collapsed by 26.4%.

In June, primary spending grew 73%, and revenues rose only 23%

The national public sector ended June with a primary deficit of 3 points of GDP. The data show the deterioration that the pandemic caused on public finances since on the one hand; it generated a drop in resources and on the other, it forced an increase in spending. Revenues rose by only 23%. Economists project a deficit for the whole of 2020 of between 7 and 8 points of GDP.

A typical family needed 40.7% more income than a year ago to avoid falling into poverty

In June, a typical family needed to have an income 40.7% higher than in the same month last year to avoid falling into poverty, according to the National Institute of Statistics and Census (INDEC). The monthly increase of the Basic Food Basket (CBA, used to measure indigence) was 0.9%, while the variation of the Total Basic Basket (CBT, used to measure poverty) was 1.7%. The interannual variations of the CBA and the CBT were 45.3% and 40.7%, respectively.