Juan Fourcaud - Oficina de Presupuesto del Congreso

BUDGET BILL 2021 – PUBLIC DEBT

by Juan Fourcaud | Oct 15, 2020 | Public Debt

The Budget Bill for the year 2021 estimates an interest expense for the national government of AR$665.95 billion for 2020 and AR$661.18 billion for 2021, including interest payable to entities within the national government. If government-owned companies, trust funds and other entities are considered, the estimated interest expense of the National Non-Financial Public Sector is equivalent to 2.5% of GDP in 2020 and 1.8% in 2021.

For 2021, the Budget Bill foresees financing needs for a total of AR$6.26 trillion (16.7% of GDP) which is assumed to be financed with new debt with entities of the national public sector for a total of AR$3.68 trillion (including temporary advances from the BCRA – Central Bank of the Argentine Republic), issuance of domestic debt securities to the private sector for AR$2.22 trillion and disbursements from international and bilateral entities for AR$348.9 billion.

Regarding BCRA’s financial assistance to the Treasury, the Budget Bill anticipates a net financing through Temporary Advances for AR$400 billion in 2021 (1.1% of GDP). In addition, profit transfers from the BCRA to the Treasury are estimated at AR$800 billion (2.1% of GDP).

Sections 42, 28 and 50 of 2021 Budget Bill establish limits to the gross amounts of securities issuance and loans maturing after the closing of fiscal year 2021 with a total authorized amount equivalent to AR$6.57 trillion. On the other hand, Sections 43 and 44 authorize the use of short-term credit (maturing within the same fiscal year), establishing limits on the outstanding amounts of such instruments for a total of AR$1.75 trillion.

ANALYSIS OF NATIONAL TAX REVENUE – SEPTEMBER 2020

by Juan Fourcaud | Oct 15, 2020 | Tax Revenue

National tax revenue showed a real increase of 5.6% in September, the first increase so far this year, partly due to adjustments in the tax deadline calendar, the relaxation of social isolation, and the lower comparison base against September 2019.

Total revenue amounted to AR$606.5 billion, which implied a nominal growth of 43.7% YoY, and Social Security resources grew for the first time in real terms since April 2018.

This growth in collection is explained by the gradual increase in the level of activity but mainly because last month’s Income Tax and Wealth Tax deadlines, originally scheduled for previous months, became effective.

In absolute terms, the taxes that contributed most to the nominal increase in revenue were Income Tax (20%), Value Added Tax (17.2%), Wealth Tax (11.8%) and PAIS Tax (11.3%).

This last tax obtained a record collection, generating AR$20.8 billion from the purchase of dollars for hoarding purposes.

FINANCIAL IMPACT OF COVID- 19 AS OF OCTOBER 5, 2020

by Juan Fourcaud | Oct 7, 2020 | Health

The national government has taken several economic measures within the framework of the health emergency and the current epidemiological situation resulting from COVID-19.

As of October 5, the measures adopted to face the crisis involve a total of AR$941.3 billion, equivalent to 3.5% of the Gross Domestic Product (GDP) and a decrease in resources of AR$96.2 billion (0.4% of GDP). Financial facilities amount to AR$530.15 billion (2.0% of GDP).

This is a dynamic report that will be permanently updated, as new regulations are introduced by the national government in the context of the pandemic, or budget amendments are made to modify appropriations to cover costs derived from the health emergency.

REVENUE IMPACT ESTIMATE OF BILL 4535-D-2020: SOLIDARITY AND EXTRAORDINARY CONTRIBUTION TO HELP MITIGATE THE PANDEMIC

by Juan Fourcaud | Sep 25, 2020 | Cost Estimates

The Bill provides for the creation of a Solidarity and Extraordinary Contribution with the purpose of generating tax funds to implement measures aimed at mitigating the economic effect of the Covid-19 pandemic.

It proposes a tax applicable to individuals who declared assets for more than AR$200 million for the fiscal year 2019, with progressive rates raging from 2% to 5.25%.

According to AFIP (Federal Administration of Public Revenues), collection could reach AR$307.9 billion, equivalent to 1.1% of current year’s GDP, given that the taxable base would be AR$8.85 trillion (41.1% GDP).

The inclusion of assets excluded from Wealth tax (mainly bank deposits, government securities and rural property) makes the taxable base under analysis approximately 4 times higher than that of Wealth tax.

FISCAL IMPACT OF BILL S-1565/19: NATIONAL YOUTH LAW

by Juan Fourcaud | Sep 21, 2020 | Cost Estimates

The purpose of Bill S-1565/19 is to establish a regulatory framework to define the rights, duties and guarantees of youth, as well as the implementation of public policy to guarantee and promote their effective exercise.

The Bill promotes changes in the institutional structure with competence over the sectors and areas involved in youth issues. It proposes the creation of three agencies for the promotion of youth development: National Secretariat of Youth, within the scope of the Chief of

Cabinet of Ministers; National Institute of Youth (INJUVE), as a decentralized entity of the Chief of Cabinet of Ministers; and Federal

Council of Youth, within the scope of INJUVE.

The Bill foresees that the necessary allocations may not be less than 0.02% of total current revenues included in the Consolidated Annual Budget for the National Public Sector.

It is estimated a fiscal cost of AR$928 million for 2020 and AR$1.3 billion for 2021.

ANALYSIS OF PUBLIC INVESTMENT BUDGET EXECUTION – JUNE 2020

by Juan Fourcaud | Sep 8, 2020 | Budget Execution

Public Investment executed in the first half of 2020 dropped 19.5% YoY in real terms compared to the first half of 2019.
Both Real Direct Investment and Capital Transfers, which are the items that make up Public Investment, showed drops in the comparison of year-on year execution of 37% and 3.9%, respectively
The drop of the Real Direct Investment is due to delays in the execution of works, which was partially offset by the purchases made by the Ministry of Health in the context of the pandemic.
For its part, the drop in Capital Transfers was driven by reduction of transfers to provinces, municipalities, and national universities.
The Budget includes 744 investment projects with appropriations, although about 50% was allocated to only 12 of them.
Of the capital transfers made in the first half of the year, 50.4% focused on the Potable Water and Sewerage function, mainly with the transfers to AYSA S.A.
From a regional point of view, investment in the first half of the year was concentrated in the Pampas Region and in interprovincial expenditures.