Argentina's economy likely contracted around 20% year-on-year in the second quarter of the year, hit by the coronavirus pandemic and a nationwide lockdown imposed in March, economists polled by Reuters estimated. That would be the worst quarter since at least the 1980s, according to official government data, and a sharper drop than any period during Argentina's major economic crisis in 2002, when the steepest quarterly fall was 16.3%.
The Argentine diplomacy in Brazil advances with the project to build a 2,400-kilometre gas pipeline to join Vaca Muerta with Porto Alegre. The mega-project will cost almost $5 billion, and its viability is already studied. The initial plan foresees the laying of 1,430 kilometres from Neuquén to the border with Brazil, in Uruguayana, and another 600 kilometres from there to Porto Alegre, where it connects to the gas distribution network of southern Brazil.
Industrial activity contracted by 2.2% year-on-year in July, although it recorded a rise of 8.4% per month in the seasonally adjusted measurement. The sector remains 3.9% below pre-pandemic levels, a product of the sectoral and regional heterogeneity.
The state's fiscal accounts are still in the red: last month, they closed with a deficit of 89.499 billion pesos ($1.18 bn), because spending increased 56.9% year-on-year, while income increased by only 32.4%. Inflation had an increase of 40.7% for the same period. The August deficit increased by 751.1% concerning a yearly basis; resulting in a fiscal deficit of 4.2% of GDP.
A judicial setback stopped YPF to save at least $70 million on a new river contract to transport fuel to northwestern Argentina. The case in question has to do with a bidding process carried out by the oil company last year, which awarded the service to the Horamar Shipping Company, which had offered a contract of $67.2 million, which implies a saving of $72.8 million concerning the previous rate of the National Shipping Company, worth $140 million per year.
The exchange measures announced on Tuesday night by the Central Bank (BCRA) produced damage in the power of intervention on the so-called "financial dollars" that the government had achieved with the debt swaps, besides affecting the patrimony of the public entities that participated in that operation. The abrupt devaluation of up to 15% that the new debt bonds suffered after the announcements caused an accounting loss of about $1.2 billion in the holdings of some $24 billion exchanged by the BCRA and the Sustainability Guarantee Fund (FGS), which administers the Anses, the two official entities that had the most significant participation in the restructuring.
The government is seeking to add 700,000 periurban hectares guaranteeing zero drift with robotics, sensors, weather station, applied agtech and, among them, nanotechnology in agrochemicals. It plans to produce 200 million tons of cereals, oilseeds and legumes.
The Government is committed to the sector and will carry out a development plan that will reach 350 million pesos for next year. The announcement will be part of the 60 measures to reactivate production. The disbursements will deliver as Non-Reimbursable Contributions through the biotechnology law.
Just when soybeans reached their maximum value in two years, getting a FOB price in local ports of $434 per ton, and in a context in which there are still some 18.3 million tons to be sold and another 8 million tons with a price to be fixed, which imply $12 billion in foreign currency to enter the national coffers, the new restrictions paralyzed the grain market.
On September 10, JP Morgan Bank rebalanced the Argentine country risk based on the prices of the new bonds, the index fell almost 50% and placed at 1,101 units. The new restrictions announced by the Central Bank (BCRA) and the National Securities Commission (CNV) affected the quotations of the sovereign instruments issued for the exchange and brought the surcharge that Argentina must pay to get into debt to 1,258 points, an increase of 14.26% in only eight days.