Due to strict restrictions on mobility and production to prevent the spread of Covid-19, Argentina’s Gross Domestic Product (GDP) plummeted by 19.1% in the second quarter of 2020, compared to the same period last year. Thus, it accumulated a 12.6% year-on-year contraction in the first semester.
The economic impact of grain crops is essential because these chains alone accounted for more than 40% of exports in the first half of the year. This industry is probably one of the most significant productive economic events for the country, for its macro economy, for employment and the supply of dollars. Beyond the excellent export performance of these complexes, the activity is hedged by high tax pressure.
The shares of Argentine companies fell after the settlement of the sovereign debt, the destruction of the value of companies listed in New York shows it: $ 13 billion were lost from August 3, one day before the settlement of the debt, until Friday last week, a fall of 17%. The figure comes from comparing the stock market capitalization of 14 Argentine companies that quoted on the US market; the banks were the most affected.
After investing $10 million to expand production capacity, Rabieta completed yesterday the shipment of the first container of the three scheduled to export 150,000 cans of craft beer to China and already has in its portfolio the next destinations: The United States, Uruguay and Spain. The brewery is in Pilar and can produce more than 200,000 litres per month and the possibility of canning 33,000 cans per day. The company is part of the Dagma group, owner of Mega Alfalfa, Federal Energy Company (Efesa, in La Rioja) and with the concession of the Palermo racetrack.
Breeders and authorities of the National Equine Industry Chamber warned that they are living the worst year in the history of the activity: in the time that there were no races due to the mandatory quarantine, in the area they lost income for about 10,000 million pesos ($132.29 mn). The lack of races also discouraged breeders’ investments and, they estimate, this will show in a 20% decrease in the births of racehorses and thoroughbreds. Argentina is the fourth world producer of thoroughbred racehorses -with 9000 foals per year-, and it estimates that for each horse there are between 5 and 7 people linked to the activity. It is one of the areas that generate the most employment in the sector.
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.