By Eliana Raszewski, Maximilian Heath and Cassandra Garrison
BUENOS AIRES (Reuters) – Argentina’s recession- and debt-wracked economy was ill prepared for the closed borders and long-distance travel ban prompted by the coronavirus pandemic, which has slammed businesses like that of local hotelier Patricia Durn.
Bookings have dried up for the owner of two hotels in the northern province of Misiones, home to South America’s famous Iguazu Falls.
“This is like an Egyptian plague,” said Durn, president of the tourism chamber in the province. “We went from an occupation of 70-80% to zero, the hotels are empty – tourist activity has died.”
While the pandemic has hit the entire global economy, Argentina was especially vulnerable: the country is battling to restructure over $110 billion of overseas debt with creditors and the IMF and says it can only pay when growth revives.
Economists are lowering forecasts for Argentina’s economy, which was already braced to shrink for a third straight year. Credit Suisse now sees a 2.6% contraction for Argentina in 2020, versus an earlier forecast of a 1% drop.
On Tuesday, Argentina’s leaders rolled out measures to boost the economy, though they are constrained by depleted reserves that have been burnt through to help pay off debts and prop up the local peso currency.
Martn Vauthier, from local economic consultancy Eco Go, said it was too early to predict economic damage from the pandemic. It depended on the severity of the measures the government took to control the spread of the virus.
“The tougher they are, the greater the economic impact.”
Tumbling commodity prices have also hurt Argentina, a grains powerhouse that is the world’s top supplier of processed soy. The pandemic has also caused some disruptions to farmers and ports that send supply as far as Asia and the Middle East.
“Today the main complication is the drop in prices everywhere,” said Juan Granero, a farmer from the breadbasket town of Chivilcoy, adding that as the harvest approached soy prices had dropped to near $200 from $240 per tonne in a matter of days.
“That’s a big drop.”
In Mendoza, the heart of Argentina’s wine country, the dramatic drop in tourism has left some wineries, or bodegas, empty while others have closed their doors.
“Obviously people are not coming,” said Jose Alberto Zuccardi, head of major local wine maker Zuccardi. The sector had already been hit by weak domestic consumption in recent years.
“It is a cause for great concern, there is no way to minimize the great effect of this,” Zuccardi added.
Performers are also being hit, including dancers of Argentina’s famed tango who have been forced to cancel shows and classes, and actors who have seen plays shut.
“Artists now can’t do the shows or acting classes we usually live from; we can’t earn our wages,” said Franco Arnoni, 25, an actor and member of the Las Catalinas community theater company in Buenos Aires.
“Imagine when three, four, five weeks of quarantine goes by and we have no money to pay for rent or food. Usually, when artists have a rough time we sing in trains or the subway, but now we can’t do this either because there’s no-one to sing to.”
Up in Misiones, Durn said she and other hoteliers were eagerly waiting for official measures to decide what to do.
“There are already many hotels that plan to close because it is not possible to recover from this,” she said.
(Reporting by Eliana Raszewksi, Maximilian Heath, Marina Lammertyn and Cassandra Garrison; Editing by Adam Jourdan and David Gregorio)
