Category: Macroeconomy/Finance

Information regarding Argentina’s productive sector and the country’s macroeconomy.

Trade surplus reached $1.44 bn, but exports dropped 11.8% and imports 23.8%

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The first eight months of 2020 result in an 11.8% drop in exports, and a more pronounced 23.8% reduction in imports, only primary products had a positive variation of 10.2%, in a context of extreme scarcity of foreign currency. Exports reached $4.94 billion and imports $3.5 billion. The commercial exchange (exports plus imports) decreased by 15.3% concerning the same period of the previous year. A surplus of $1.44 billion is not good news in this context of the economy in a deep recession. If it grows again, that surplus will reduce rapidly. The bad news added to the data of the fall of the GDP and employment in Argentina.

Half of employed people earn less than $355

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According to INDEC, half of the people employed in Q2 2020, received a monthly amount of up to 27,000 pesos ($355), while the average income of those occupied was 31,868 pesos ($420). Statistics show that the labour income obtained by the population increased nominally by 15% concerning the second quarter of 2019; below inflation, with a drop of almost 20% in real terms. It anticipates a sharp increase in poverty and indigence levels. Also, social income inequality has widened.

In the second quarter, poverty will be 46%

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Due to the fall in the population’s income, especially those with fewer resources, poverty will reach 46% of the urban population in the second quarter of the year. This figure projects to the entire country, including the rural community, which is 20.8 million people who lived with incomes below the poverty line.

Moody’s warns of growing private default risk by official regulation

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Moody’s estimates that communication A 7106, which restricts the access of indebted companies to the official dollar market to cancel their obligations, will harm the capacity of local companies to pay in time and form. For the financial firm, the capital maturities of negotiable obligations (corporate bonds) between October 15, 2020, and March 31, 2021 (the period in which, in principle, this limitation applies) total $12.53 million.

The economy fell 19.1% in the second quarter

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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.

Argentine companies are worth almost $13 billion less than 45 days ago

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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.

Argentina economy set for record 20% drop in Q2 on pandemic impact

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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%.

Fiscal deficit increased 751% in one year

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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.