Juan Fourcaud - Oficina de Presupuesto del Congreso

PUBLIC DEBT OPERATIONS – JANUARY 2021

by Juan Fourcaud | Feb 11, 2021 | Public Debt Operations

Two auctions were held in January resulting in the placement of instruments in argentine pesos for an original nominal value of AR$250.19 billion.

Marketable government securities for the equivalent of USD2.18 billion were canceled. Of that total, USD2.17 billion were cash payments (AR$189.56 billion), and the remainder were swap transactions of securities in dollars.
During the month, loan disbursements for USD35 million were received and amortizations for USD291 million were paid, mainly from bilateral loans.

Interest payments for USD434 million were made, of which 85% was in argentine pesos. Interest payment of Cuasipar and Discount in pesos adjustable by CER (Reference Stabilization Coefficient) for a total of AR$16.02 billion (approximately USD189 million) stands out.

Maturities for February are estimated at USD4.01 billion, (amortizations for USD3.55 billion and interest for USD455 million). Excluding holdings within the public sector, estimated maturities are reduced to USD2.05 billion.

For the term February-December 2021, maturities are estimated at USD53.08 billion, reduced at USD28.4 billion if maturities within public sector are excluded.

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – JANUARY 2021

by Juan Fourcaud | Feb 10, 2021 | Budget Execution

There was a real improvement in the primary and financial balances in January 2021 compared to January 2020, due to a decrease in expenditure and the restructuring of tax revenues. The financial surplus of AR$101.47 billion contrasts with the deficit of AR$3.86 billion recorded in January 2020, while the primary balance reached AR$138.45 billion, an increase of 23.5% in real terms compared to the previous year (AR$81.15 billion).

Revenues increased 3.4% year-over-year (YoY), basically because of the 25.1% YoY increase in tax revenues, which offset negative indicators in other items.

The boost was provided by Export Duties, basically because of the low basis for comparison of the previous year, as many operations had been anticipated in December 2019, resulting in lower revenues in January 2020.

Primary expenditure decreased 1.9% YoY with a mixed performance per item. The largest reductions were recorded in current transfers to provinces, pensions, and wages, with indicators of 34.0% YoY, 13.5% YoY, and 4.5% YoY, respectively.

Total expenditure accounted for 5.4% of the budget appropriations. Transfers to universities stand out for the level of expenditure execution reached (6.8%).

ANALYSIS OF NATIONAL TAX REVENUE – JANUARY 2021

by Juan Fourcaud | Feb 5, 2021 | Tax Revenue

Tax revenue amounted to AR$ 772.86 billion in January 2021, which implied a growth of 46.6% year-over-year (YOY).

For its part, inflation-adjusted revenue expanded by 6.3% YOY, the fifth consecutive improvement and the highest growth since May 2018.

The gradual recovery of the activity level, the devaluation of the peso and regulatory changes contributed favorably to the collection of Wealth, Income, and Internal co-participable taxes, as well as PAIS tax, respectively.

The low base of comparison in terms of Export Duties favored these resources to show a good performance, because of the reduced payment of Duties in January 2020, after the advance that had operated during the last months of 2019.

The increase in soybean prices also contributed.
Social Security revenue continued its downward trend, although at a slower pace.

BUDGET EXECUTION OF SDG 10: REDUCE INEQUALITY WITHIN AND AMONG COUNTRIES

by Juan Fourcaud | Feb 4, 2021 | Sustainable Development Goals

SDG 10, one of the Goals set by the United Nations to which Argentina adhered, seeks to reduce inequalities within and among countries.

Argentina set four goals in relation to SDG 10: to achieve income growth for the poorest segment of the population; to promote social, economic, and political inclusion; to ensure equal opportunities; and to achieve greater income equality.

The effects of the Covid-19 pandemic and the unstable economic context prior to it, resulted in a sharp deterioration in income inequality indicators. This situation highlights the important challenges that the National government faces to achieve the commitments assumed in the 2030 Agenda.

The income of the richest segment of the population was 13 times higher than the income of the poorest segment in 2020.
The income gap between the richest and the poorest showed a growing trend starting in 2019, with a significant increase in 2020.
Between 2016 and 2020, two out of ten people had an income below half the median.
Thirty-three percent of the population reported having suffered some type of discrimination during 2013 (latest data published by the National Institute against Discrimination, Xenophobia and Racism – INADI). If new information is not produced, it will be impossible to determine the efforts to be made to meet the goal assumed by the country.
The goal set for the Gini index for 2023 implies reaching a coefficient below the historical minimum in the last 30 years which indicates the magnitude of the challenge to be faced.
Direct expenditure on SDG 10 totaled AR$ 2.8 trillion, and the indirect expenditure AR$ 353.7 million as of November 2020.
The program “Potenciar Trabajo” represented the highest of the direct expenditures made by the responsible agencies.
The National Social Security Administration (ANSES) played a key role in the expenditure aimed at improving income distribution, through the management and settlement of monetary benefits to vulnerable households and individuals.

ANALYSIS OF PUBLIC INVESTMENT BUDGET EXECUTION – YEAR 2020

by Juan Fourcaud | Feb 3, 2021 | Budget Execution

Public Investment executed by the national government in 2020 amounted to AR$ 300.45 billion, a drop in real terms of 16.9% YOY (year-over-year) but turns into an increase of 12.9% if we exclude from 2019 the recording of AR$ 67.27 billion for the expenditure adjustments made in other fiscal years. While Direct Investment, one of the two concepts of Public Investment, shows a drop of 55.1% YOY, Capital Transfers show an increase of 42.9% YOY.

The fall of Direct Investment is due to the delays in the execution of the works that were partially offset by the purchase of sanitary and laboratory equipment by the Ministry of Health in the framework of the health emergency caused by COVID-19.
The 2019 Budget, extended during 2020, included 1,082 works. During 2020, only 487 of them were executed. More than half of the accrued in investment projects was concentrated in 15 works, mostly for the construction of highways within the scope of the National Road Authority (Dirección Nacional de Vialidad)
Of the growth in Capital Transfers, 47.6% went to State-owned companies. AYSA S.A. and IASA S.A. stand out with increases of 64.8% YOY and 128.2% YOY respectively, compared to those made in 2019.
From a geographical point of view, more than half of Public Investment focused on the Pampas region, followed by an unspecified region.
Public Investment as a percentage of the Gross Domestic Product (GDP) was 1.1%. If the adjustments mentioned above are not considered, 2019 becomes the year with the lowest investment, equivalent to 0.9% of GDP.

BUDGET EXECUTION OF SOCIAL INVESTMENT IN CHILDREN AND ADOLESCENTS

by Juan Fourcaud | Feb 2, 2021 | Budget Execution

In mid-2020, there were 13,151,586 children and adolescents (up to 17 years of age) in Argentina. 57.1% of that universe was poor and 15.8%, indigent, rates much higher than the general average of the population.

About 4.6 million of children and 2.9 million of adolescents were below the poverty line.
Poverty and indigence rates in households with children and adolescents were three times higher than those in households without children and adolescents.
Of households with employed persons in which minors live, 40% were below the poverty line. This means that despite having at least one salary, this income was not enough to cover the family’s basic needs.
Of children and adolescents in compulsory education age (4 to 17 years of age), 96.9%were in school, most of them attending public schools. For the non-compulsory segment, this percentage drops to 14.5%.
The incidence of poverty drops significantly if the head of the household completed his or her secondary education. However, one out of every six households headed by a person with university education was below the poverty line.
The actions undertaken by the national government to care for children and adolescents implied a budgetary effort of 3.6% of GDP in 2020, 12.7% of total expenditure.
Public policy aimed at improving the general conditions of the population, which also have an impact on this segment, required an additional 2.4%.
State efforts were insufficient to substantially improve the living conditions of this age group, and it is necessary to pay more attention to children and adolescents to guarantee their access to basic rights.