Nicolas Perez - Oficina de Presupuesto del Congreso

ANALYSIS OF NATIONAL GOVERNMENT BUDGET AMENDMENTS FOR THE YEAR 2024

by Nicolas Perez | Jul 8, 2024 | Budget Amendments

The Budget Law approved by the National Congress is amended during the year in accordance with the delegation of powers arising from the regulations in force. Within this framework, it is important to analyze those amendments to provide updated data on the budgetary dynamics throughout the fiscal year.

To this end, these periodic reports focus on the analysis of budgetary amendments made by Administrative Decisions of the Chief of Cabinet of Ministers (JGM) or by Necessity and Urgency Decrees (DNU).

WE PARTICIPATED IN THE MEETING OF THE COMMITTEE ON PETITIONS, POWERS AND REGULATIONS OF THE CHAMBER OF DEPUTIES, WHICH IS ANALYZING THE EXTENSION OF THE SCOPE OF OPC’S TECHNICAL SUPPORT

by Nicolas Perez | Jun 27, 2024 | Activities

The OPC director, Gabriel Esterelles, was invited by the authorities of the Committee chaired by Deputy Silvia Lospennato to give his opinion on different projects under discussion that envisage broadening the scope of the OPC’s assistance to parliamentary work. The meeting took place on Tuesday, June 26 in room number 4 on the third floor of the Dr. Juan Carlos Pugliese building, Annex of the National Congress building.

Mr. Esterelles explained the work of the OPC and the progress made during the six years of the office’s existence, highlighting the significant improvements in terms of response to legislators’ demands.

In recent years, the number of requests for measuring the fiscal impact of bills under study has increased. The OPC went from analyzing an average of 16/17 issues in recent years to more than 40 in the first half of 2024 alone and reduced the average turnaround time to just under two weeks. This timeframe compares with the CBO (Congressional Budget Office) in the U.S., an office with a 50-year track record and ten times the size of the OPC, which produces about 700 reports per year.

“The reference to the production of other similar agencies, of larger size and trajectory, shows that we have a similar performance and allows us to know that we are on the right track. The fact that today it is being discussed to give the OPC a greater participation in the estimation of the fiscal impact of the initiatives is a recognition of this work, although it is also a challenge in relation to the maximum capacity of production of reports”, said the OPC director.

At the meeting, it was proposed as a possible course of action to agree on a mechanism for prioritizing requests so as not to generate bottlenecks and thus enable the OPC to respond to the prioritized demands.

The legislators emphasized the value of the technical analysis of the Office for their work and considered Law 27,343 of 2016, which created the OPC, as one of the best decisions made by the National Congress.

PUBLIC DEBT OPERATIONS – MAY 2024

by Nicolas Perez | Jun 25, 2024 | Public Debt Operations

In, May, domestic currency debt stock increased by 17.5% with respect to April and amounted to ARS159,868.068 billion. Foreign currency debt decreased by USD1.805 billion, reaching USD254.668 billion.

Two government securities auctions were held during the month, through which LECAP, BONCER and Bonte USD-linked were placed for a total of CV ARS15,223.471 billion.
The repurchases of Central Bank’s holdings of AL35 and AL29 bonds in dollars by the Treasury for USD2.13 billion stood out.
The equivalent of USD1.033 billion was paid for interest in foreign currency, of which USD796 million were payments to the IMF.
Estimated debt service between June and December in domestic currency totals ARS37,234.473 billion and in foreign currency USD14.816 billion.

PUBLIC DEBT OPERATIONS – MAY 2024

BILL ON PALLIATIVE AND RELEVANT TAX MEASURES – UPDATE AFTER MAJORITY REPORT OF THE SENATE

by Nicolas Perez | Jun 11, 2024 | Cost Estimates

This report analyzes the changes introduced to the original text of the Palliative and Relevant Tax Measures Law and its fiscal impact after the approval of the Chamber of Deputies and in the majority report of the Senate.

In terms of fiscal impact, the following changes were identified:

The increase in the benefit to compliant taxpayers of the Wealth Tax could potentially increase the fiscal cost of the amendments in tax years 2023 to 2025, as compared to the original text of the bill.
The changes to the text of the Income Tax reform would reduce the impact of these measures on the assessed tax in 2024 from 0.5004% of GDP in the original text to 0.4303% under the text approved by the Chamber of Deputies and to 0.4111% of GDP under the text of the majority report of the Senate.
As for the Simplified Regime for Small Taxpayers, the differentiated treatment granted to social effectors in the majority report of the Senate would moderate the expected increase in the collection of the integrated tax (monotributo) and the health insurance system (obras sociales).

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – MAY 2024

by Nicolas Perez | Jun 7, 2024 | Budget Execution

In the first five months of the year, the National Government obtained a financial surplus of almost ARS2.2 trillion, in contrast to a deficit of ARS2.3 trillion obtained in the same period of 2023.

The cumulative primary surplus, which does not include debt interest payments, amounted to ARS6.4 trillion, as opposed to a primary deficit of ARS1.1 trillion a year earlier.

The month of May also recorded financial and primary surpluses of ARS1.3 trillion and ARS2.5 trillion, respectively.

National Government revenues fell 0.2% and expenditures fell 27.6%.
All expenditure components showed real declines compared to 2023, except for debt interest payments, which grew 1.5% YoY.
Pensions decreased 25.8% and explain 9.0 points of the expenditure reduction.
Due to the fall in real wages and lower employment levels, Social Security contributions decreased by 19.5%.
Current transfers to the provinces and capital expenditures were the items with the largest decreases, with variations of -84.5% YoY and -81.1% YoY, respectively.
The level of transfers to universities (68.8%) and energy subsidies (65.2%) stood out in comparison with the execution of total expenditure (52.3%).

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – MAY 2024

FISCAL IMPACT OF BILLS ON THE NATIONAL TEACHER INCENTIVE FUND

by Nicolas Perez | May 30, 2024 | Cost Estimates

The seven bills analyzed propose to reinstate the Teacher Incentive Fund (FONID) from the first day of 2024 for different periods of time, which means paying retroactively the past months and then continuing with the monthly accrual.

The FONID was created for the “improvement” of teachers’ salaries, as a remunerative and non-bonus supplement.

The Fund was complemented by the National Teacher Salary Compensation Program, still in force, both of which are covered by appropriations provided for in the national budget.

No payments for these purposes were made this year.
In 2023, expenditures related to the budget program National Teacher Incentive Fund had a share of 0.18% of GDP.
In the last quarter of last year, teachers received an average monthly amount of ARS25,000 for this concept, between 5.9% and 12.3% of the gross salary of a primary school teacher with ten years of seniority.
The restitution of FONID would imply an expenditure of ARSS1,294.77 billion for 2024, equivalent to 0.21% of GDP if inflation for the last quarter of 2023 is considered and 0.16% of GDP if only inflation for 2024 is taken into account.
Individual amounts would range from ARS43,994 in January to ARS90,786 in December.
If the benefit were applied to retirees, the additional fiscal cost would be equivalent to 0.01% of GDP for every 100,000 teachers.