Lockdown will drive deep 2020 recession in Argentina

Significance

The lockdown has successfully slowed the virus’s spread, but is taking a severe economic and social toll. While it has been gradually lifted in parts of the country, the continuing strict quarantine in the Buenos Aires metropolitan area (AMBA) will drive the sharpest recession since 2002.

Impacts

• Government aid will be insufficient to prevent a wave of bankruptcies and a rise in unemployment.
• The sharp drop in economic activity will reduce the government’s tax revenues and ability to provide emergency relief.
• If the government reaches a debt restructuring agreement, international investments could play a key role in recovery.