OPC 5 Budget Law 5 GENERAL DESCRIPTION OF THE CONTENTS OF THE 2021 NATIONAL BUDGET BILL

GENERAL DESCRIPTION OF THE CONTENTS OF THE 2021 NATIONAL BUDGET BILL

October 14, 2020

The National Budget Bill for 2021 foresees for next year a decrease in deficits due to the partial
recovery of the economy, with an increase in public investments and a reduction in the payment
of interest on the debt.

  • According to the macroeconomic estimates of the Bill, the Gross Domestic Product
    (GDP) will suffer a real fall of 12.1% this year, the nominal exchange rate will be AR$81.4
    per dollar at the closing of the fiscal year, and the YoY inflation rate will be 32%. Next
    year’s GDP is expected to rise 5.5% in real terms, with a nominal exchange rate of
    AR$102.4 per dollar in December, and an inflation rate of 29% YoY.
  • Resources will increase by 9.7% YoY in real terms and total expenditure will fall by
    10.4% YoY.
  • This dynamic between revenue and spending will lead to an improvement in the primary
    balance in 2021, which would go from a deficit of 8.5% of GDP in 2020 to a deficit of
    4.5% in 2021. The same applies to the financial balance, which would vary from a deficit
    of 10.5% of GDP in 2020 to a deficit of 6.0% in 2021.
  • Capital expenditures will have the largest real increase and debt interest the sharpest
    decline.
  • Gross financing needs in the next fiscal year will be AR$6.4 trillion (17.2% of GDP). The
    Central Bank will contribute AR$800 billion to the Treasury, 62.2% less than this year.
  • Exports are expected to recover from a 14.2% YoY decline this year to a 10.4% YoY
    increase next year.
  • The Budget Bill does not provide neither financial allocations for Emergency Family
    Income – IFE (Ingreso Familiar de Emergencia) nor for assistance for the payment of
    private salaries (ATP), but it does provide a 24.1% increase in resources for vaccines
    (AR$45.4 billion), including the purchase of doses against COVID-19 (AR$13.69 billion).
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