June 29, 2020 / 7:09 PM / 2 months ago

Argentina economic activity plunges record 26.4% in April amid pandemic

FILE PHOTO: Employees work in a pizza shop as TV announces 97 confirmed cases of the coronavirus disease (COVID-19), in Buenos Aires, Argentina March 18, 2020. REUTERS/Agustin Marcarian

BUENOS AIRES (Reuters) - Argentina’s economic activity plunged 26.4% in April, the country’s official statistics agency said on Monday, the worst monthly fall on record as the country reeled from the impact of the novel coronavirus pandemic and a nationwide lockdown.

The April drop, after the South American grains producer imposed the lockdown in mid-March, was worse than the 21% decline predicted by analysts polled by Reuters, underscoring how badly the pandemic has battered local industry.

Argentina’s government faces a tough balancing act between combating a recent spike in COVID-19 cases and reopening the economy. It has extended a quarantine in and around Buenos Aires but relaxed rules in other parts of the country.

The fall, which followed an 11.5% drop in March, surpassed declines during crises in 2002 and 2009 and was the worst since statistics agency INDEC started record keeping in 1993.

Already mired in recession for two years and in default on foreign debts, Argentina is headed for an annual economic contraction in 2020 that organizations, including the International Monetary Fund, have estimated at about 10%.

The worst-hit sectors included construction along with the hotel and restaurant industry, which fell over 85%, INDEC said.

Argentina is meanwhile racing to restructure around $65 billion in foreign debt, with a deadline for a deal in late July after talks stalled earlier this month, despite the government and creditors having edged close to a deal.

The country’s bonds rose 1.2% on Monday on hopes that two sides will bridge their differences in coming weeks.

“The debt negotiations continue to move forward as economic indicators remind us that there are more difficult problems to solve along the way,” Argentine investment services firm Grupo SBS said in a report.

Reporting by Jorge Iorio; Writing by Adam Jourdan; Editing by Sonya Hepinstall and Tom Brown

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