The pandemic unleashed by the coronavirus will have unintended effects on regional economies. According to the Ieral of the Mediterranean Foundation, to analyze its impact three variables must be considered: exports, tourism and public finances.
“It must be taken into account that Argentina is a relatively closed country, even when there are more exporting provinces, as is the case of the Pampas (Santa Fe, La Pampa and Córdoba, mainly derived from the countryside), some Patagonian (Chubut and Santa Cruz, petroleum) and San Juan (gold) ”, the economic institute specified in its latest conjuncture report.
For the Ieral, the most affected region would be Patagonia, more dependent on oil. He assures that since the end of last year there has been a decrease in activity in the most dynamic area, which is Vaca Muerta, and that with the current low prices it will aggravate his situation.
“The problem of this region is its strong dependence on negro black gold’, which makes it more vulnerable, an effect that is reinforced by the fact that in Patagonia are the provinces that usually receive the greatest flow of foreign tourists. Although in this case it is also necessary to include Misiones, Mendoza, Salta and the City of Buenos Aires (Caba), ”according to the report.
The health of public finances will also be decisive in mitigating the effects of the disease on the economic structure. In this regard, the Ieral warns that the recession and the last elections deteriorated the provincial coffers, which aggravates its situation picture.
“Not only is the probability of accessing financing via debt almost nil, but the provinces do not have the inflation tax either,” said the report, which warns that in the third quarter of last year, most of the provinces were with their accounts. in red. According to its content, among the most complicated, there are several northerners (Jujuy, Tucumán and La Rioja) and several Patagonian ones.
The original text of this article was published on 03/21/2020 in our printed edition.