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Economy in focus, Argentina's pandemic strategy shifts for second wave

Kitco News

BUENOS AIRES (Reuters) - Argentina's President Alberto Fernandez was clear when COVID-19 first hit the country early last year: saving lives at all costs trumped any economic concerns.

Now facing a second wave of infections, the South American nation has adjusted its strategy to prioritize protecting its fragile economy. It is hoping greater experience dealing with the coronavirus, a nascent vaccine program, and short, regional lockdowns can help keep the virus in check.

The second wave comes at a delicate time for the center-left Peronist government. It is heading for mid-term elections in October to defend its majority in Congress, its popularity bruised by a strict, lengthy lockdown last year and the hard economic hit.

The grains producer is also in talks with the International Monetary Fund to revamp some $45 billion in loans it cannot pay back and needs to fire up economic growth to bring in much needed hard currency. And creditors are looking for signs of recovery after a sovereign debt restructuring last year.

The Fernandez administration wants to avoid imposing a blanket lockdown, instead using data on caseloads to establish short-term localized restrictions, reinforce sanitary measures, and maintain controls over borders, a government source said.

The government also wants to accelerate a vaccine roll-out delayed by shortage of supply, aiming to have all medical workers and those at high risk vaccinated before the fast-approaching southern winter.

Argentina's economy contracted around 10% last year, the third straight year of recession, and Economy Minister Martin Guzman has said it "could not withstand" another total shutdown. Poverty levels rose to 42% in the second half of last year.

The country has recorded around 2.4 million coronavirus cases and over 56,000 deaths, and a second wave is building with recent daily cases at 80% of the peak and rising, a Reuters tally of official data shows. On Tuesday, infections reached a daily record.

"The second wave and incidence of cases could be even worse when the variants take hold," said Tomás Orduna, an infectious disease specialist who advises the government, referring to the P1 'Brazilian' variant and others racing through the region.

'WARNING LIGHTS'

Argentine infectious diseases expert Martin Hojman said the southern hemisphere winter and reopening of activities would keep driving the second wave.

He said the rate of vaccinations - which has seen some 4.3 million doses administered so far in a country with a population of around 45 million - was not fast enough.

Leda Guzzi, a Buenos Aires-based infectious disease expert, said there had been a very substantial jump in cases over the last month, and pointed to the 'R number', which measures transmission rates, soaring in some areas.

"When this index is greater than 1.2 it means that cases are accelerating in a worrying way and that the warning lights should come on... This is happening in various jurisdictions and various departments," she said.

Despite that, schools and restaurants in most places are open, and many Argentines say they do not want another strict lockdown.

"I think there must be a middle ground where the economy does not collapse and stores do not close and so many people are left on the street and without work," said Ambar Rujal, a 19-year-old student in Buenos Aires.

Jorge Giacobbe, a Buenos Aires-based political analyst, said the government would not want to risk upsetting voters so close to October's legislative elections.

"There are going to be restrictions, but the government knows that it cannot make harsh restrictions again. People will not allow it after having suffered such a strict quarantine in 2020," he said.

Reporting by Agustin Geist; Additional reporting by Eliana Raszewski; Editing by Adam Jourdan and Rosalba O'Brien

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