Even before the coronavirus pandemic struck the nation and wreaked havoc across the world, Argentina's economy contracted last year, highlighting how difficult it will be for President Alberto Fernández to change things with the country now stuck in isolation.
Gross domestic product, the broadest indicator of economic activity, contracted 2.2 percent annually last year, the second consecutive year in the red. In the fourth quarter, GDP fell one percent from the previous quarter and 1.1 percent from the previous year.
Political volatility, which was underscored by Fernández's overwhelming victory in last August's PASO primaries, reversed an incipient economic recovery last year, causing the peso to plummet and the government to come close to defaulting.
"President Alberto Fernández and his economic team announced measures to mitigate the economic impact of the outbreak and isolation measures for the most vulnerable groups, but the limited margin for monetary policy means that the recession may be more acute in 2020 than in the previous two years," said Bloomberg economist Adriana Dupita. "For now, we project an economic contraction of 2.7 percent for this year, with a sharp slowdown in the first half and a slight recovery in the second half."
Economists were already projecting a third year of recession in 2020 for the second-largest nation in South America, even before the virus arrived. Now, many predict a more pronounced contraction. Bank of America economists expect a "much deeper" recession in Argentina with the impact of the virus.
Fernández implemented a national quarantine until March 31 to contain the outbreak, although he said Wednesday that he would extend it longer if necessary, adding that he believes Argentina's coronavirus cases will peak in the first half of May.