LatAm Daily Briefing: Chile’s Economic Activity Slumps 15% in May; Colombia Tops 100,000 Covid-19 Cases; Peru to Resume Flights

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

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


Argentina’s President Alberto Fernández called for the construction of a more egalitarian world post-pandemic, during a virtual meeting of Mercosur, the Southern Common Market that comprises Argentina, Brazil, Paraguay and Uruguay, on Thursday. He said the world is “in the same boat”, even though some are traveling in first-class cabins, and which is being tossed about “on the seas of the pandemic”. He called for the trade bloc to work together to end inequalities as the region moves to rebuild its economies post-Covid-19 pandemic, local newspaper Página 12 reported. Argentina is currently renegotiating its $65 billion sovereign debt with its creditors after defaulting on payments for the ninth time in May. The country remains under partial lockdown to stem the spread of Covid-19, with the death toll currently at 1,351, with more than 67,000 confirmed cases.

More than 1,000 Brazilian delivery drivers who work for companies such as Rappi and Uber held a protest in São Paulo and other cities on Wednesday to protest their working conditions, as their services remain in high demand due to the Covid-19 lockdowns, Reuters reported. The drivers are seeking better pay and improved health measures as they face exposure to infection, with Brazil now a coronavirus epicenter and delivery workers facing exposure to the virus. The country’s lockdown has increased demand for home deliveries, with Brazil now second only to the US in the number of deaths from the virus, which have now surpassed 60,000, with more than 1.46 million confirmed cases.

Chile’s economic activity slumped 15.3% in May, the central bank said on Wednesday, which followed similarly bleak results for April, when activity dived by 14.1%. The country remains in lockdown after restriction measures were re-imposed following a partial reopening that led to a spike in infections. Chile’s Finance Minister called the plunging output figures “monumental” but insisted that the results are not as bad as were feared, with some economists having predicted a contraction of economic activity of up to 20%, according to regional news agency MercoPress. Despite the plummet in output, the world’s largest copper producer saw mining activity increase by 1.2% in May, while non-mining output declined by 17%, according to the central bank.

Colombia’s health authorities have confirmed that the number of cases of Covid-19 in the country has surpassed 100,000, while the death toll now stands at 3,470, according to the National Health Institute (INS). Almost one-third of infections were reported in the capital Bogotá, while the country’s Caribbean coastal region is the second-hardest hit area, with the virus having killed a reported 1,000 people in the cities of Barranquilla and Cartagena de Indias. The pandemic is expected to reach its peak in August, according to the INS. Last week Bogotá’s Mayor Claudia López had called on President Iván Duque to slow down the reopening of the country’s economic activities in a bid to stem the spread of the virus.

The new free trade deal between Mexico, the US and Canada, came into effect on July 1st. The new agreement, the USMCA, replaces the North American Free Trade Agreement (NAFTA), which was in place since 1994, and the renegotiation of which was one of the priorities of President Donald Trump upon taking office, who had described NAFTA as unfair to the US. The USMCA contains new content rules for vehicles manufactured in the three countries, more intellectual property protection and rules aimed at preventing currency manipulation, and is expected to provide more protection for Mexican workers, as the treaty stipulates higher wages for employees at US or Canadian-owned assembly plants in the country, conditions which were made obligatory for the approval of the treaty by the US congress.

Peru will restart domestic flights and inter-provincial bus services from July 15th, according to Transport and Communications Minister Carlos Lozada, following the approval of protocols negotiated with airlines and operators to avoid the spread of Covid-19. The protocols will allow aircraft to be filled to full capacity with the use of filters at airports to monitor passengers’ health, Lozada was quoted by El Comercio newspaper as saying.  He said however that the restarting of flights will be gradual, with only around 40% of services restarting during the first month, and which will be primarily used by family members returning to their places of origin, having been stranded elsewhere during the Covid-19 lockdown, which was enforced in March.

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