INDEC: Economy contracted by 5.4% in first quarter of 2020

Argentina's gross domestic product (GDP) shrank by 5.4 percent year-on-year in the first quarter of 2020, the INDEC national statistics bureau said Tuesday.

Official data also showed that unemployment rose to 10.4 percent in the same period.

The first quarter does not incorporate a large part of the lockdown imposed to tackle the spread of the coronavirus pandemic. In comparison to the fourth quarter of 2019, in seasonally adjusted terms, INDEC said imports fell 7.6 percent, private consumption was down 6.8 percent and public consumption dropped 1.6 percent.

INDEC also said that unemployment in the first quarter of the year rose to 10.4 percent, a rise of 0.3 percentage points year-on-year and of 1.5 points from the last quarter of 2019.

Argentina's economy has been gripped by recession for almost two years and industry and commerce was all but paralysed on March 20 when President Alberto Fernández ordered a compulsory nationwide lockdown in a bid to limit infections. Those measures have now been relaxed in 20 of the nation's 24 districts, though strict restrictions remain in place in the Buenos Aires metropolitan area, where more than 90 percent of cases are concentrated.

Those in the capital and its surroundings will reach 100 days of quarantine as of Saturday. To date, almost 45,000 people have tested positive for the novel coronavirus. More than 1,000 fatalities have been recorded to date, with 13,500 said to have recovered from the virus.

President Fernández is expected to announce an extension of the lockdown in the capital and its surroundings on Thursday after a meeting with health experts scheduled for 5pm. An announcement will follow after that. Restrictions are currently set to expire on June 28.

GDP in Argentina contracted by 2.5 percent in 2019, with most private analysts predicting a contraction of at least 9.5 percent this year thanks to the pandemic-induced shutdown in economic activity.

The government is currently seeking to restructure more than US$66 billion in foreign debt, though talks with creditors have now stalled. Officials last week extended the deadline for a deal by another five weeks.

– TIMES/AFP