Daniel Fernández Canedo
06/29/2020 - 20:20
- Clarín.com
- Economy
- Economy
None of those responsible can be misled. Facing the coronavirus pandemic with the mandatory isolation of the vast majority of the population would implode the economy.
The fall in activity in April, the first month with full validity of quarantine, was 26.4% compared to the same period of the previous year. A painful landslide that capped 30 consecutive months of recession and was more pronounced than 16.7% in March 2002.
But the current crisis is unprecedented because it is a pandemic that no one can say for sure when it will end and, therefore, it would also demand new responses in economic matters.
The lousy April data does not guarantee, either, that the crisis has touched bottom and that the reactivation is just around the corner. Preliminary data from the tax collection of the beginning of May, which serve as a predictor, show, according to the IARAF, that there is little margin for optimism and even more so on the doorstep of the tightening of the quarantine for the AMBA as of 1 July.
Some government officials are trying to signal that the worst of the crisis is over, as shown by a video from the Ministry of Productive Development that maintains that the economy is already "reactivating" because much of the country's territory has returned to power to work.
Surely the fall in activity will ease in the coming months before returning to work in various areas of the country, but in April it is worth considering: none of the 15 sectors that make up the EMAE estimator exhibited growth, and in the cases of construction and hotels and restaurants the drop was respectively 86.4% and 85.6% and the slide did not save nor the food that showed a drop of 1% despite having been the main item of demand for families.
A distinctive and key issue regarding whether the exit from the 2001 crisis serves as a mirror for the current situation is that it started from a high level of impoverishment but with a situation of "twin surpluses" : external surplus due to a surge in the dollar that boosted exports and collapsed imports and a Treasury that collected more than it spent.
Today the attention of the pandemic, according to the first official estimates, has already demanded the equivalent of 2% of GDP as a result of a doubling of public spending and the fall in tax collection and projects a primary fiscal deficit of more than 5 points of GDP, starting of a red of the order of 0.5%.
Half of this deficit, practically, was covered with an issue that was destined to the welfare policy through the IFE bond, ATP credits, the payment of social plans and also retirement and wages in the public sector.
A State without sufficient revenue from the fall in activity and without credit, issued in a few months $ 1.2 trillion pesos, the equivalent of 4% of GDP. What about inflation? It went on but did not fire . Uncertainty about the end of the crisis increased families' fear of spending.
In part, because of fear and uncertainty, it is that getting out of this crisis will require signs, in addition to being able to earn credit again.
The initial idea of the sustained government that by expanding consumption everything would be resolved quickly collided with the pandemic. And despite the fact that a lot was issued to compensate people's pockets for the prohibition to go out to work, fear and caution prevailed.
For investment, it is presumed, the messages should arrive in the event that the extensive negotiation of the debt swap (it takes more than six months) ends up overcoming the bottleneck of the partial default in which a country stagnant nine years ago finds itself. years and the coronavirus gave the activity a historic blow.