Argentina’s economy likely contracted around 20% year-on-year in the second quarter of the year, hit by the coronavirus pandemic and a nationwide lockdown imposed in March, economists polled by Reuters estimated ahead of the official data release on Tuesday.
That would be the worst quarter since at least the 1980s, according to official government data, and a sharper drop than any period during Argentina’s major economic crisis in 2002, when the steepest quarterly fall was 16.3%.
The South American grains producer, in recession since 2018 and just emerging from default on its sovereign debt, has been hit hard by the pandemic despite a tough early lockdown. It has over 640,000 confirmed COVID-19 cases, and nearly 13,500 deaths.
The government imposed the lockdown on March 20, and while it has been eased it remains in place until at least Oct. 11, with Argentina still at its peak in terms of daily case numbers. The country recorded over 400 deaths in 24 hours on Monday.
“The key is in lockdown; restriction on supply and the blow it had on demand pummeled economic activity in the second quarter of 2020,” said consultancy Ecolatina.
A Reuters poll of 14 local and foreign analysts gave a forecast for a 19.9% average contraction for the April-June period and a median estimate of a 19.6% drop. Predictions ranged from drops of 19.4% to a steepest 21.1% fall.
“The strong isolation restrictions imposed from the second half of March and that lasted until August had a significant economic cost for the entire country,” said economist Natalia Motyl, from consultancy Libertad y Progreso.
Motyl added that services, construction and manufacturing had been the hardest hit, while the important farm export sector had been less affected by the lockdown, that had taken a hit from global commodities prices.
Argentina’s economy, which declined 5.4% in the first quarter of the year, is estimated to contract around 12% this year, according to a central bank poll and government forecasts.
Reporting by Hernan Nessi; Additional reporting by Gabriel Burin; Writing by Adam Jourdan; Editing by Chizu Nomiyama and Jonathan Oatis