Nicolas Perez - Oficina de Presupuesto del Congreso

REPORT ON NATIONAL PUBLIC INVESTMENT BUDGET EXECUTION – Second quarter 2019

by Nicolas Perez | Aug 30, 2019 | Public Investment

During the second quarter of 2019, public investment totaled AR$41.98 billion, showing a drop in its relative allocation, both as a proportion of total expenditure (5.71% to 3.66%) and in terms of GDP (0.33% to 0.20%).

The composition by geographic region shows a heterogeneous pattern, with a high concentration in the Pampas region (50.0% of the total). The investment “without specified region” accounts for an additional 16.9% – due to the significance of the Inter-provincials -, followed by the Northwest Region (13.5%), the Patagonian Region (8.0%), the Northeast (7.1%) and Cuyo Region (4.5%).

In terms of physical progress, 50.8% of the works show a minimum degree of progress (less than 20%), 5.3% show a low degree of progress (between 20% and 40%), 10.3%, medium-low progress (between 40% and 60%), 6.3%, medium-high progress (between 60% and 80%) and another 16.6%, high progress (greater than 80%), while there are 10.7% of works for which no physical execution data are available.

Public Debt Operations – July 2019

by Nicolas Perez | Aug 13, 2019 | Public Debt Operations

Placements of government securities and loan disbursements for USD13.1 billion were recorded during July. The International Monetary Fund (IMF) made the fourth disbursement under the Stand-By Arrangement for USD5.39 billion.

Treasury Bills in pesos and dollars for the equivalent of USD5.57 billion were placed through three auctions.
During the month, debt services amounted to USD9.2 billion, USD6.57 billion in payments of principal and USD2.64 billion in interest.
On July 1, approximately USD1.01 billion of interest were paid on the Discount and Cuasipar bonds.
The main maturities scheduled for August are Treasury bills in pesos and dollars. In addition, interest payments to the IMF for USD240 million are expected to be made.

ANALYSIS OF THE 2018 NATIONAL GOVERNMENT FINANCIAL REPORT – PUBLIC DEBT

by Nicolas Perez | Aug 12, 2019 | Financial Report, Public Debt

According to data recorded in the National Government Financial Report, as of December 31, 2018, the stock of national public debt totaled USD330.59 billion, accumulating an increase of USD11.3 billion throughout that year. As a proportion of Gross Domestic Product, the debt increased 29.5 percentage points (p.p.) to reach 85.8% of GDP.

Of the USD28 billion disbursed in 2018 by the International Monetary Fund, USD7.5 billion went to strengthen the Central Bank’s reserves, and the rest to budgetary financing.

Excluding the IMF, the debt incurred with international and bilateral official organizations showed a net reduction of USD873 million in 2018. This was due to the cancellation of services with the Paris Club for USD1.9 billion, partially offset by net disbursements from the World Bank, the CAF and the IDB for USD365 million, USD312 million, and USD129 million, respectively.

The national government did not make use of the authorization to issue up to AR$14 billion in treasury bills to backup fuel and electric power imports.

Analysis of National Tax Revenue – July 2019

by Nicolas Perez | Aug 9, 2019 | Tax Revenue

In July, tax revenue grew in nominal terms, although it declined in real terms, as it has been the case in the last few months. However, if we compare the cumulative for 2019 against the same period of the previous year, the decrease is slower.

It is estimated that this relative improvement in the tax collection performance is linked to a higher level of activity which, according to the EMAE (Monthly Estimator of Economic Activity, prepared by INDEC), showed in April the first improvement in more than a year.

The most important feature was a 7.3% growth in Income Tax while the VAT drop (1.6%) was lower than in previous months. Even Social Security resources, which fell 9.5% in the year-on-year comparison due to the low growth of the wage bill and certain regulatory changes, recorded the smallest drop since July last year.

In relative terms, growth continued to be led by Export Duties, which rose 298.7% year-on-year. So far this year, DGI VAT collection shows significant volatility.

Analysis of Budget Execution – July 2019 – Accrual Basis

by Nicolas Perez | Aug 8, 2019 | Budget Execution

A surplus of AR$43.42 billion was recorded in July, a considerable improvement over the previous year’s figure (-AR$1.9 billion). The financial balance is negative by AR$21.04 billion but implies a drop of 44.4% in real terms in the year-on-year comparison. Transfers to provinces showed a monthly year-on-year drop for the first time this year.

The increase in resources slowed down in July, although they grew again above expenditures (55.9% vs. 49.0%).
Tax revenues (58.8%) led total revenue growth, while debt interest (186.4%) and capital expenditures (152.9%) were the fastest growing components of public expenditure.
In the first seven months of the year, the financial balance was negative by AR$359.1 billion, an increase of 11.2% with respect to the same period of the previous year. In real terms, this represents a reduction of 27.9%.
During the first seven months of the year, 57.0% of total expenditure was accrued, identical to the level recorded in the same period a year ago.
From the beginning of the fiscal year to the end of July, the initial budget was increased by AR$88.3 billion, that is, 2.1%. The 39.2% of the amendments were implemented through the Necessity and Urgency Decree 193, while the remaining 60.8% were implemented through four Administrative Decisions.

ANALYSIS OF THE 2018 NATIONAL GOVERNMENT FINANCIAL REPORT – BUDGET EXECUTION

by Nicolas Perez | Aug 7, 2019 | Financial Report

The National Budget executed in 2018 recorded resources and expenditures above those projected for the year, although the primary deficit was very similar to that predicted (-AR$271.63 billion), with a deviation of -0.8%.

Budget execution showed a deviation of 13.0% in the initial estimate of resources, of 14.6% in total expenditures and of 11.4% in primary expenditures compared to the initially approved appropriation.

However, due to the 33.8% deviation in debt interest, the financial deficit was almost 20% higher than what had been projected in the Budget and reached -AR$813.7 billion.

In terms of expenditure purposes, the only expenditure that increased was public debt, with a real year-on-year increase of 27.1%, while there were real decreases in government management (-32.5% YoY), defense and security services (-11.0% YoY), economic services (-7.1% YoY) and social services (-6.2% YoY).

The comparison of what was budgeted and executed shows differences in macroeconomic projections such as the evolution of GDP: the assumption was that it would grow 3.5% but it fell 2.5%.

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