June 26, 2020
1. President Alberto Fernández announced a new extension of the isolation
Through a recorded message, President Alberto Fernández, together with the Governor of the Buenos Aires Province, Axel Kicillof, and the Head of Government of the Buenos Aires City, Horacio Rodríguez Larreta, announced the extension of the preventive, mandatory and social isolation. Due to the increase in the number of cases, this new phase will have greater restrictions in the Buenos Aires Metropolitan Area (AMBA), which will return to a stricter quarantine from July 1 to July 17. On the other hand, as of Monday, public transport will only be for the 24 essential activities (dictated in Decree 297/20), who will have to renew a new circulation permit.
2. Regulation of remote work approved in Chamber of Deputies
Following weeks of debate in the legislative commission on labor, the Chamber of Deputies approved a bill regulating remote work, a measure sanctioned by both the majority and opposition parties and approval on June 24th. The project considers the right to “digitally disconnect,” the provision of equipment, appropriate work schedules, among others. It is worth noting that the law still requires approval from the Senate, and in case of approval would enter into effect 90 days after the end of the quarantine. Application and enforcement of the law would fall under the auspices of the Ministry of Labor. On the other hand, the project modifying the knowledge economy rules, sent by the executive branch to Congress last February, was also approved and will be debated in the Senate. The Knowledge Economy System includes a series of financial and labor benefits for companies adhering to it, and still requires full legislative approval and executive branch regulation before entering into effect.
3. INDEC publishes GDP and unemployment figures
The Argentine statistical agency (INDEC) reported that Argentina’s GDP fell 5.4% in the first quarter of 2020, while unemployment rose to 10.4% – a 0.3% rise from the same period in 2019. When compared to the fourth quarter of 2019, GDP fell 4.8%. The most affected sectors included fishing (-30.4%), construction (-20.8%), and hotels and restaurants (-10.2%). Argentina’s total GDP stands at ARS $25 trillion (USD $356.02 billion) when measured beginning the second quarter of 2019.
4. Morgan Stanley maintains classification of Argentina as emerging market
Morgan Stanley Capital International (MSCI) maintained its classification of Argentina as an emerging market. Nonetheless, it warned that Argentina could lose its place in the emerging markets index in the case that there is further deterioration in market accessibility.” MSCI develops an index divided into three categories (frontier, emerging and developed), according to certain economic conditions in each market. Argentina is classified as “emerging” along with countries like China, India, Brazil and Russia. Belonging to the emerging market categories, which Argentina achieved in May 2019 after 10 years, implies compliance with specific conditions, like the freedom to access exchange markets.
5. IMF projects -9.9% drop in Argentine GDP for 2020
The International Monetary Fund (IMF) published its World Economic Outlook, where it projected a -9.9% drop in Argentina’s GDP for 2020 – among the sharpest such drops in the world. Additionally, the multilateral lender estimated that Argentina would also experience one of the slowest recoveries in 2021, at +3.9%. Brazil and Mexico, two of the primary recipients of Argentine exports, are also in the crosshairs of a deep recession, with the IMF projecting contractions of -9.1% and -10.5%, respectively. On a global scale, the IMF estimates that global economic crisis will cause a -4.9% drop in GDP in 2020, followed by a recovery of +5.4% in 2021.