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LatinNews Daily - 04 June 2021

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In brief: Warnings in Argentina of economic impact of restrictions

* A new report published by Fundación Mediterránea/Instituto de Estudios sobre la Realidad Argentina y Latinoamericana (IERAL), a local think-tank, warns that Argentina’s GDP could shrink 2.5% in the second quarter of 2021 compared with the first quarter (in seasonally-adjusted terms) as a result of restrictions imposed in recent weeks in response to a strong second wave of the coronavirus (Covid-19) infections. It also warns that in June, GDP could return to levels similar to those of the fourth quarter of 2020. According to the think-tank, collection of taxes associated with the domestic market fell 5.2% in May compared with April, after having fallen 1.6% in April compared with March. In its latest Economic Outlook report released at the end of last month, the Organisation for Economic Co-operation and Development (OECD) projects that Argentina’s GDP will grow 6.1% this year, having contracted by 9.9% in 2020. The OECD also notes that new mobility restrictions imposed in April are slowing the recovery, while “rising macroeconomic imbalances” also limit the pace of recovery.