April 23, 2021
1. In-person classes resume in the city of Buenos Aires
Following President Alberto Fernández’s announcement that suspended in-person education in the Buenos Aires metro area, the city of Buenos Aires’ Chamber of Appeals filed a protective order and ordered the district to continue in-person classes at schools, going against emergency Decree 241/2021. Nonetheless, a federal judge annulled the decision, and suspended classes once again. Buenos Aires Mayor Horacio Rodríguez Larreta, in turn, ratified their continuation until the Supreme Court rules on the matter.
2. Government extends prohibition on job dismissals or suspensions without just cause
By means of Decree 266/2021, published in the Official Bulletin, the national government extended its ban on job dismissals and suspensions without just cause, and due to lack or reduction of work and force majeure through May 31st. Exempt from the prohibition include suspensions carried out under the terms of Article 223 bis of the Law on Job Contracting (lack of activity). As a result of the health emergency, the construction sector is also exempt from the law. The measure took effect last April in a bid to control unemployment as a result of the COVID-19 pandemic. Labor Minister Claudio Moroni assured that at the end of 2020, this measure will remain in place until Argentina’s economic situation normalizes.
3. The opposition announced that it will support the postponement of the primary elections
Through a press release, the leadership of Juntos por el Cambio announced that they will join the proposal to delay the electoral schedule, which means the deferment of the primary elections (PASO) for the month of September, and the general ones for the month of November. However, according to the statement released, the initiative will be accompanied by a clause, which will be to insert an article in the text where it is established that the electoral law may not be modified or repealed during the current calendar year. On the other hand, the implementation of the single ballot and early voting for Argentines abroad were also demanded. In this regard, the next step for the leaders of the opposition interblock in the Chamber of Deputies will be to summon the Minister of the Interior, Eduardo “Wado” De Pedro, on whom the National Electoral Direction depends, to speak before the Committees for Constitutional Affairs and Legislation.
4. Economic activity falls 2.6% year-over-year in February
The Argentine statistical agency (INDEC) published its monthly economic activity index (EMAE) which revealed a 1% drop in economic activity over January 2021, and a 2.6% year-over-year drop. Although these figures are a far cry from the 26.4% and 20.6% drops registered in May and April 2020, respectively, economic activity has halted overall economic recuperation. The sectors with the best year-over-year performance include construction (11.7%), financial intermediation (3.5%), trade (3.4%), and manufacturing (1.6%). By comparison, the sectors experiencing the largest declines included hotels and restaurants (-38.2%), fishing (-16.7%), and mining and quarrying (-9.8%). Additionally, March registered a trade surplus of USD $400 million, less than the USD $1.06 billion registered in February. This trade surplus has been driven by a year-over-year increase in exports of 30.5% (USD $5.72 billion), while imports increased 68.7% compared to March 2020 (USD $5.32 billion). Additionally, the Economy Ministry revealed financial results from March, revealing a primary deficit of ARS $74.46 billion (USD $799.6 million) and a financial deficit of ARS $117.06 billion (USD $1.26 billion). Economic recovery projections for this year expect a 7% bump in GDP, according to official calculations made for the 2021 national budget, just under IMF and private projections which place this figure closer to a range of 5 and 6.4%.
Ámbito Financiero: Con menos gasto covid, Economía moderó el déficit fiscal en marzo
5. Debate over reforms to company income taxes continues in Chamber of Deputies
The Chamber of Deputies’ Budget and Finance Committee, led by Peronist Carlos Heller, began to review a bill that would modify taxes on income for companies. This week, Tax Policy Secretary Roberto Arias, and Argentine tax revenue agency (AFIP) head, Mercedes Marcó del Pont presented at a virtual information meeting. Arias stated that “we are not proposing a rate higher than that of developed countries but are creating one below average; what differentiates us is that we have a high income tax rate.” Marcó del Pont, for her part, defended the project signaling that decreases in taxes will only lead to a greater concentration of wealth and an orientation towards this excess accumulation of wealth, without production. It is worth mentioning that with this initiative, companies with accumulated net incomes of more than AR$ 20,000,000 will return to tax 35%. The opposition Juntos por el Cambio coalition made advances on an opinion condemning this measure.