LatAm Daily Briefing: Argentina’s Economic Output Down by 26% in April; Chile’s Unemployment Rate Hits 11.2%; Former Pemex CEO t

30 June: Find out what's been happening in Latin America with our latest news update.

30 June: Find out what's been happening in Latin America with our latest news update.


Argentina's economic activity plummeted by 26.4% year-on-year in April, the first full month in which non-essential businesses were shuttered to contain the spread of Covid-19. The month-on-month decline in output was 17.5%, according to the country’s statistics agency Indec. Economic activity had declined by 11.5% year-on-year in March. Economic activity declined across all 16 sectors analyzed by Indec, with the sharpest fall in the construction sector, which declined by 86.4% against the same month in 2019, followed by the hospitality and restaurant sector, which registered an 85.6% decline, while manufacturing output fell by 34.4% and retail by 27%, Indec said.

Pharmaceutical company AstraZeneca has signed a deal with Brazil to supply around 30 million doses of a vaccine against Covid-19, around half of which will be available by December, while Brazil has also committed to producing an additional 70 million doses, with AstraZeneca supplying the unfinished vaccine at no cost. "In accordance with AstraZeneca's commitment globally, the company will supply the vaccine to countries without considering profit during the pandemic,” the company said. The vaccine doses will be finished in Brazil by the Oswaldo Cruz Foundation, also known as Fiocruz, as AstraZeneca does not have a vaccine production suite at its Brazilian manufacturing facility. Trials are underway in Brazil of a vaccine developed by the UK’s Oxford Jenner Institute, with Brazil the first country in Latin America to undertake trials, and which will involve 5,000 volunteers in three cities.

Chile’s unemployment rate hit 11.2% between March and May, the government said on Tuesday, exacerbated by the shutdown of the economy in the face of the Covid-19 pandemic. All of the country’s capital Santiago is still under lockdown after restrictions were re-imposed following a surge in cases after some businesses, including shopping malls, were allowed to reopen earlier this month. Unemployment has increased most severely in the commerce, accommodation, food services and construction sectors, according to national statistics agency INE, while self-employed people were the worst hit across the board. INE director Sandra Quijada was quoted by Reuters as saying that many Chilean workers have dropped out of the labor force all together amid the lockdown, which has affected more than half of the country’s population. They may struggle to find jobs when they return to work, and which would further swell the unemployment rate, Quijada said.

Australian mining company SolGold said on Tuesday it plans to acquire the issued and outstanding shares of Ecuadorian mining partner Cornerstone Capital. SolGold presented an all-stock transaction of 11 of its shares for each Cornerstone share, which it said represented a premium of about 22% over Cornerstone’s June 29th share price on the TSX-V, and a premium of 56% based on the volume-weighted average trading price over the last 12 months. “This is an exciting value-enhancing opportunity, providing Cornerstone shareholders with a premium over the current market price for their Cornerstone investment and continued participation in a consolidated and much more attractive ownership structure for the world-class copper/gold Alpala project in northern Ecuador,” SolGold CEO Nick Mather was quoted by media as saying. “We invite Cornerstone investors to be a part of SolGold’s ultimate vision to become a major copper/gold mining company in Ecuador, where SolGold’s award-winning exploration teams have identified a number of priority copper/gold targets with similar or better prospects than even Alpala, and are rapidly advancing these,” Mather said.

The former chief executive of Mexico’s state oil company Pemex has dropped his fight against extradition from Spain to face corruption charges in Mexico. Emilio Lozoya, who was chief executive of the company from 2012-16, is accused in Mexico of corruption related to bribery and money laundering involving Brazilian construction conglomerate Odebrecht, which pleaded guilty in the US to acts of corruption across various Latin American jurisdictions, involving various companies and individuals. Lozoya has accepted in writing to a Spanish criminal court to be extradited to Mexico and pledged to turn himself over to Mexican authorities “to establish and clarify" the charges against him, according to local media reports in Mexico. Lozoya was arrested in Spain in February.

Peru’s government has created a fund to assist the country’s tourism sector, which has been hard hit by the Covid-19 pandemic and subsequent lockdown. The government published a decree on Tuesday to grant credits to small and medium-sized companies operating in the sector. Companies eligible for the handouts include those in the accommodation, road passenger transport, excursion, convention and event, tourist guide and handcraft production sectors. The government will channel S/500 million ($141 million) into the plan, which will be managed by the Foreign Trade and Tourism Ministry (Mincetur). Peru’s tourism sector is expected to see losses totaling $2 billion as a result of the Covid-19 pandemic, according to media reports.

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