May 15, 2020
1. Government begins fourth phase of obligatory social isolation
Through Decree 459/2020, the government made its extension of the mandatory preventative social isolation official through May 24th, ushering in the fourth phase of “progressive reopening.” The measure permits governors to make their own exceptions to the quarantine in municipalities with up to 500,000 people. In the case of municipalities with a population exceeding 500,000 – as long as it is outside the Buenos Aires metropolitan area – governors can include new exceptions to the quarantine with prior national government approval, aside from the list of pre-approved activities that do not require additional permissions. In the Buenos Aires metropolitan area on the other hand, local authorities must request new exceptions from the Chief of Staff, who will conduct an epidemiological risk analysis alongside the Ministry of Health.
2. Congress meets virtually for the first time in its history
Following an absence of two months, Congress convened virtually for the first time in its history. The Senate met first, presided over by Senate President and Vice President Cristina Fernández de Kirchner. The Senate approved 20 Decrees of Urgency and Necessity (DNU) submitted by the executive branch over the duration of the quarantine. The Chamber of Deputies began its session at 6PM, where they approved income tax relief for workers in healthcare, public security and the armed forces. In the upcoming sessions, the majority party will seek approval of a project that establishes a wealth tax, although it has not yet been presented to the legislature.
3. Government extends timeframe for external debt negotiations
Through Resolution 221/2020, the government extended the negotiation period for USD $503 million in external debt to May 22nd, the date where the grace period for repaying private creditors expires. With this extension, the government enters a critical phase as it tries to avoid defaulting on its obligations. Moreover, the government has the explicit support of the IMF to carry out negotiations.
4. April inflation at 1.5%
The Argentine statistical agency (INDEC) informed that April ended with an inflation figure of 1.5%, adding up to a 12-month total of 45.6%. With this figure, the consumer price index – the government’s official measure of inflation – experienced its lowest monthly increase over the past two years. The inflation rate’s deceleration occurred as a result of the emission of large sums of money by the national government in a bid to inject much-needed liquidity into the economy. Moreover, the crisis caused by the pandemic has prompted the government to freeze prices of essential products, public services like gas, water, public transit and electricity.
5. Brazil seeks the return of Argentina to Mercosur negotiation
Following the conflict generated by the Argentine government’s decision to suspend free trade negotiations within the framework of Mercosur, Brazilian Vice President Hamilton Mourão expressed his hope that Argentina return to the negotiating table. He recognized the need to reorganize, as “Mercosur is moving through a tough period to advance on bilateral agreements, since Argentina is experiencing a serious economic crisis.”