03/10/2020 - 10:35
The Coronavirus crisis could further deepen the recession in Argentina. In fact, most economists are already reviewing their downward projections for the impact of the global epidemic, possible complications in debt restructuring and falling commodity prices (from oil to soybeans ).
However, the director of Ecolatina, Lorenzo Sigaut Gravina, summarizes, "the great concern is what happens in the fall and that the Coronavirus becomes a new influenza A ". In that dreaded winter, the economy fell 5.9% after seven years of growth at Chinese rates, which resulted in the first electoral defeat of Kirchnerism.
The global scenario today is much more complicated, due to the double "Black Swan" : the Coronavirus and the fall in the price of oil. According to analysts, the impact complicates debt restructuring plans, a crucial issue for the Government.
"At the end of February we projected a contraction of GDP just over 1%. Today we raise it to 1.5%, minimum, " Sigaut risks.
For his part, the director of LCG, Guido Lorenzo, estimates that the fall will be closer to 2%, "if the negotiation for the debt is successful and Argentina is not going to a default." For this economist, the economic downturn will be smaller, " the more successful and faster the exit ."
The crown of the Coronavirus is already felt. In principle, due to the lower demand for Argentine products from the most affected countries, mainly China. Analytica projects a drop in exports of US $ 57.7 billion registered in 2019 to US $ 53.5 billion for this year .
This would have to add low tourism, lower prices of local production and devaluations in emerging currencies, with particular concern for the real of Brazil, the largest trading partner of Argentina. "If we add a health problem to this complicated scenario, it would be a horrible combo, " says Marcelo Elizondo, director of the DNI consultancy.
The fear is that the virus can spread in the country from May, with the first cold. And may the "perfect storm" of 2009 be repeated , which deepens an economic contraction that has already taken 10 years. It was after the conflict with the countryside, the global crisis of Lehman Brothers, the fall in the super prices of soybeans and the drought in the countryside, which complicated the harvest. "To all this was added the psychosis of influenza A , which depressed consumption," Sigaut recalled. This economist, anyway, adds that today "we are less exposed than in other parts of the world, but it is not free."
Barbara Gueretza Echagüe, an analyst at the Arriazu study, analyzes that among other consequences, the Coronavirus is affecting the world economy. "International trade stops, imports, production, demand for products and prices fall," he says.
But it highlights that for Argentina, the impact for now is limited. " I think it is more important," he interprets, "to move forward with debt restructuring and fiscal policy ."
With respect to the devaluations of emerging currencies, Gueretza argues that the peso has an adequate value. "Argentina does not need it. The peso went from $ 17 to $ 60 and today is not appreciated . The key is to resolve the debt and maintain a proper fiscal and monetary policy," he said.
Elizondo, meanwhile, avoids being blunt to assess the possible consequences of Coronavirus in Argentina. "The international scenario is very complicated and cannot be avoided. But to face this storm, you must have a reliable policy and that begins with a debt negotiation that is as friendly as possible," he said.
The global epidemic, analyzes Matías Carugati, of Seido, "is a disruptive event throughout the value chain." This implies that the spread of the virus, "takes away momentum from global economic growth, which impacts" on real economies. "In his opinion, the impact on Argentina for now is low, but" this economy has nothing left over and with the change of season the risks will change. "This consultant is also updating its projections in a negative way, due to the risks involved in the arrival of autumn.