The Argentine economy is the least affected in the region so far and one of the best that could come out of the pandemic, according to the World Economic Outlook report published this week by the Monetary Fund.. In his update of the growth forecasts for 2020, he reported that Argentine GDP would fall 9.9 percent. If this forecast is compared with that made by the agency at the beginning of the year, before all the economies were impacted by Covid-19, the expected recession for Argentina was 1.3 percent, which is equivalent to the pandemic and the measures required to prevent its spread involved an additional 8.6 drop points.
THE TIGHTENING OF THE ANTIQUARANTINE
This is the least pandemic impact in the region, with the exception of Chile, which in January was in full social outbreak and had already suffered a sharp cut in the Fund’s projections, and from various developed countries. In countries that did not take measures in time and privileged economic interests, such as Brazil and Peru, the coronavirus reduced them to 16.3 points of their Product.
In the midst of the pandemic, economic power groups insist on underestimating the impact of the isolation measures in the country to press for their lifting. The argument is that the deterioration of the activity it generates is unsustainable and they accuse these measures and not the paralysis pandemic. In a World Bank study, a comparison was made between this year’s growth estimate for a broad set of countries and the stringency of the quarantine applied by the respective governments. The conclusion is that the countries with light insulation measures saw their activity decline further. The Fund’s data ratify that view.
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This week the Fund released its estimates for this year and anticipates a 4.9 percent global recession, 1.9 points below the estimates that the agency itself had made last April. “As with the WEO projections for April 2020, there is a higher degree of uncertainty about this forecast than usual,” said lead agency Kristalina Gerogieva. For Argentina, it forecast a Product fall of 9.9 percent, compared to the setback estimated in the April report of 5.7 percent and above the 1.3 recession forecast in January.
To answer the question of what is the estimated impact of the pandemic Fund, The uncovering He compared the agency’s projections revealed in June to the forecasts released in January, before the pandemic infected the global economy.
In the region, the country most affected is Peru, which maintains a weak quarantine and that, however, this year will fall 13.9 percent, while at the beginning of the year it was anticipated that it would grow by 2.4 percent. The difference is 16.3 percentage points that the Peruvian economy will fall due to the pandemic. In the case of Mexico, went from estimating a one-point growth in GDP to a recession of 10.5 percent (-11.5 percentage points explained by the pandemic). In Brazil, where the Bolsonaro administration was the focus of attention for its refusal to take measures to care for the contagion population, the IMF had anticipated growth of 2.2 percent in January and now estimates a drop of 9.1 percent (-11.3 percentage points).
In Colombia The impact is similar, going from an improvement of 3.5 percent in its activity for this year to a recession of 7.8 percent.
At Chilean case, the estimate for January was of growth of 0.9 percent, while in June the Fund predicted that it will close with a drop of 8.4 percent (-8.4 percentage points due to the pandemic). Almost similar to Argentina, but in January the Fund had already cut its projection from 2.1 to 0.9 percent due to the social crisis that the Piñera government was exhibiting.
If you compare the Argentine case even with U.S, beyond the difference that represents a point of GDP in each case, it was less impacted as well. The Trump administration would end this year, according to the IMF, with a drop in its Product of 8 percent, compared to the growth estimate of 1.6 percent in January. The difference are 9.6 percentage points drop due to the effect of the pandemic, in a country that became a beacon for anti-quarantine governments like Bolsonaro’s.
In the most affected countries in Europe the impact is much greater. In France it went from estimating an increase in the Product of 1.3 percent to a fall of 12.5 percent (-13.8 percentage points) and in Italy it was upgraded from a 0.5 percent improvement to a 12.5 percent decline (13 points). China, of the affected countries, is the one that will best emerge from the situation. In January they predicted a growth of 6 percent and will end with a rise of 1 percent. Lost 5 points.
Quarantine is not free in economic terms, although there is no figure that can quantify each life saved. However, the figures provided by the economies themselves in the world, without distinction between developed or emerging, show that, in one way or another, the activity suffers. The key is not whether or not quarantine is applied to save lives, but how willing some governments are to cushion the effect on the population. Ultimately, it will be the way families are cared for that defines recovery next year. The Argentine economy had also been hit with three of the last four years in recession.
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