October 23, 2020
1. Government extends preventive, mandatory and social isolation measures
On Friday afternoon, President Alberto Fernandez announced, in a conference from the province of Misiones, a new extension of the mandatory, preventive and social isolation measures for 14 more days starting on October 25th. On this occasion, the President assured that Argentina “did not manage to overcome the problem of the pandemic” of the Covid-19 and warned that eight provinces (Córdoba, Santa Fe, Tucumán, Mendoza, Neuquén, Río Negro, Chubut and San Luis) concentrate 55% of the infections. On the other hand, Fernandez remarked that the country registers 14,000 positive cases daily and that the province of Buenos Aires and the City continue to decline. “Although there is a clear decrease, we cannot say that we are calmed, because there is a significant number of infections,” stated the president.
2. Economy Minister Martín Guzmán positions financial sustainability as state policy goal
Economy Minister Martín Guzmán commented on the economic situation of the country during a meeting of the Organization of Ibero-American States (OEI). In this event, the minister declared that the government’s objective is to ensure that financial sustainability becomes a state policy. He also stated that “we have a robust trade surplus, there are no foreign debt payments we have to make as we successfully restructured our debt and we have enough reserves to deal with exchange rate pressures.” Additionally, Guzmán explained that accumulating reserves will be part of the program they take on with the IMF and that it will be presented to Congress and include a financial pathway and a multi-annual recuperation of reserves. IMF Director Kristalina Georgieva supported Guzmán’s announcements via Twitter.
3. Economic activity drops -11.6% in August
The Argentine statistical agency (INDEC) released its monthly economic activity index, revealing an -11.6% drop in August to the same period last year. In the first eight months of the year, economic activity accumulated a drop of -12.5% compared to the same period in 2019. The sectors experiencing the sharpest drops include hotels and restaurants (-56%), community, social and personal services (-53.7%) and construction (-32.1%). Conversely, financial intermediation registered a 4.1% increase.
4. Government makes minimum wage increase official
Through the Ministry of Labor, Employment and Social Security’s Resolution 4/2020, the national monthly minimum wage will be increased to ARS $21,600 (USD $277) by March 2021. According to the official timeline, the minimum wage will begin at ARS $18,900 for full-time workers and ARS $94.50 (USD $1.21) per hour for hourly earners. Beginning on December 1st, these figures will increase to ARS $20,587.50 and ARS $102.94, respectively. Finally, on March 1st, this figure will increase to ARS $21,600 and ARS $108. On the other hand, the executive branch confirmed an update on minimum and maximum unemployment benefits, which starting on Monday will be ARS $6,000 and ARS $10,000, respectively.
5. New financial assistance program for collaborative knowledge economy
Through Resolution 240/2020 published in the Official Bulletin, the Ministry of Productive Development announced the creation of the Collaborative Production for the Knowledge Economy program with the objective of providing financial assistance to innovative projects that combine at least two knowledge economy initiatives. The benefit involves access to credits at bonus rates up to ARS $100 million (USD $1.2 million) and a non-refundable contribution up to AR $24 million (USD $307,711). Among the activities to be promoted include software development, big data, biotechnology, nanotechnology, satellite engineering, artificial intelligence, and 3D printing, as well as “other [activities] that in the short and medium term will facilitate the reactivation of economic activity.”