May 22, 2020
1. Regions determine next steps alongside national government
President Alberto Fernández met with the governor of the province of Buenos Aires, Axel Kicillof, and the mayor of the city of Buenos Aires, Horacio Rodríguez Larreta, to analyze next steps on the quarantine. It is worth noting that both the metropolitan area and the city of Buenos Aires have not yet entered phase 4 of the obligatory social isolation measures, as the region has 80% of Argentina’s coronavirus cases. The government of the province of Córdoba backtracked, returning to phase 3 after registering 50 additional positive cases of COVID-19 over the past few days. Besides, President Fernández visited the provinces of Santiago del Estero and Tucumán, a trip which marked his first domestic trip since the beginning of the national preventative and mandatory social isolation measures.
2. Economy Minister Martín Guzmán speaks about debt
Minister of Economy, Martín Guzmán, participated in a virtual conference organized by AmCham, the U.S. Chamber of Commerce in Argentina. “Negotiations will continue, we need an orderly solution, a sustainable agreement,” stated Guzmán referring to the country’s debt. The minister acknowledged that he saw value in the offers presented by creditors that create a starting point for further negotiations adding that there is a “good chance that the deadline [on bonds] will be extended”. Today, May 22nd, was the new deadline established by the government to accept the offer to exchange USD $67 billion in debt issued under foreign law. After failing to reach an agreement with creditors on May 8th, the previous expiration date, Argentina extended the deadline and received three counteroffers from creditors. Today is also the expiration date for USD $503 million in bonds emitted under foreign legislation, that originally reached maturity last April 22nd, which could determine the country’s financial future as it approaches default.
3. The Congress sessioned in virtual session again
Yesterday, virtual sessions were held again in the Congress. The Chamber of Deputies gave half a sanction and turned to the Senate the bills that enable distance education for all educational levels, as well as digital prescriptions and telemedicine. In addition, the president of the Chamber, Sergio Massa, anticipated that the Chief of Staff, Santiago Cafiero, will attend in June to give his report on the management of the national government. At the same time, the Senate unanimously approved the first three laws in the country’s parliamentary history, with tax benefits and protection for essential workers who carry out tasks in the fight against the coronavirus.
La Voz del Interior: El Congreso sancionó sus tres primeras leyes virtuales
4. Government fixes price of “barril criollo” at USD $45
Through Decree 488/20, the government fixed the price of crude oil distributed in the domestic market at USD $45. Producers and refineries must use the price of the Medanito crude blend, from the Vaca Muerta shale field, in a bid to protect domestic jobs and revenue. The price will be standard for each type of crude through the end of the year, unless the price of Brent crude exceeds USD $45 for 10 consecutive days, at which point the price will once again return to the international price. During this time, the sector must maintain activity levels and/or production levels registered during 2019 and must retain the same workforce they had on December 31, 2019. Refineries and distributors must acquire all crude from domestic producers, taking into account the quality of crude needed for the refining process. It is worth noting that the Secretariat of Energy will have full power to modify the fixed price of crude on a quarterly basis.
Ámbito Financiero: Vuelve el “barril criollo” a u$s45, pero con requisitos a las empresas
5. March economic activity backtracks 11.5%
The Argentine statistical agency (INDEC) revealed an 11.5% year over year drop in economic activity in the month of March – the month when preventative and mandatory social isolation measures were put in place. Additionally, in this month, economic activity fell 9.5% compared to the previous month and added up to a 5.4% drop in the first quarter of 2020. The drop is accompanied by a 15.5% contraction in manufacturing and a 46.5% plummet in the construction sector. Additionally, trade dropped 11.2%, and transport and communications by 14.8%. According to INDEC, the year over year drop was the largest such figure since the 13.7% registered in May 2009 during a period of tumult in rural areas and the swine flu pandemic.