Argentina expected to announce large drop in Q1 GDP growth
Argentina will release its first quarter GDP and unemployment figures today, amid the negative economic effects of the COVID-19 pandemic and uncertainty produced by debt restructuring negotiations.
The COVID-19 crisis has ravaged Argentina’s already ailing economy. After a 1.1% year-on-year contraction in the fourth quarter of 2019 and declining economic activity during the first two months of 2020, the pandemic has deepened the country’s recession and exacerbated its troubled fiscal position. Argentina’s lockdown, one of the strictest in Latin America, has forced the closure of many businesses, slashed industrial activity and exports and left an increasing number of workers jobless.
Argentina defaulted on a $500 million bond interest payment on May 22 and the deadline to produce an agreement to restructure its $65 billion debt has been extended on three occasions. This poor economic performance will likely force the government to push for an extension in future bond payments to maintain liquidity.
Today’s figures are expected to show a large increase to the current 8.9% unemployment rate and another GDP fall for the first quarter. The IMF anticipates an annual 5.7% GDP reduction for the South American nation.
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