Argentina's Post-Pandemic Recovery Will Take 'Many Years' - Expert

Argentina's Post-Pandemic Recovery Will Take 'Many Years' - Expert

BUENOS AIRES (UrduPoint News / Sputnik - 08th June, 2021) Argentina's per capita GDP, already in dire straits before the pandemic, will need more years to recover as leading economic indicators show that things have got even worse, Orlando Ferreres, an economist and founder of the Orlando Ferreres & Associates consulting firm, told Sputnik.

"It will take many years for the GDP per capita to recover, because it was already poor and with the pandemic, it worsened," Orlando Ferreres said in an interview.

According to the biannual report of the World Economic Outlook of the Organization for Economic Cooperation and Development (OECD), it will take the country's economy more than six years to recover, and its GDP per capita will not reach the pre-pandemic levels until the second quarter of 2026. So, Argentina will be the last to rebound among all the G20 countries.

At the same time, the examples of China and Turkey are completely different, as their economies reached the previous levels before the end of 2020, the OECD reported. Chile, Brazil, Colombia, and Mexico are also ahead of Argentina.

Still, the country is expected to see economic activity, which plunged 9.9% in 2020, to bounce back this year.

"This year it is going to recover by half or a little more, but it will take several years to fully restore the level of GDP per capita," Ferreres added.

Moreover, the economist said, even though Argentina's fixed gross domestic investment was 18%, it fell to 8% in April 2020. Since then the investment level has increased a lot, but it is still 15.8% of GDP. That is not a significant improvement "because there is a lot of financing for agricultural machinery and construction, but it is not noticeable in the rest of the economy," Ferreres noted.

Since 2018, Argentina has been going through a serious economic crisis which saw it turn to the International Monetary Fund for a $57 billion loan. The country defaulted on its debt to private creditors last year. When the pandemic broke out a year ago the Latin American country was among the hardest-hit in the region.