by Nicolas Perez | Jun 25, 2019 | Budget Law
Administrative Decision No. 449/19 approved the Consolidated Budget of the National Public Sector for Fiscal Year 2019, in compliance with the provisions of Article 55 of Law No. 24,156 on Financial Administration and Control Systems of the National Public Sector, as amended. Said article provides that the National Budget Office must prepare the consolidated budget annually and submit it to the National Executive Branch before March 31 of the year in which it is in effect. Once approved, it is submitted to the National Congress.
The Consolidated Budget of the National Public Sector represents the integration of the economic transactions carried out by the different agencies of the National Public Sector, which provides information on the total public expenditure and revenue and the effect on the rest of the economic system.
by Nicolas Perez | Jun 13, 2019 | Public Debt Operations
- During May, placements of government securities and loan disbursements totaled USD6.5 billion, mainly through the issuance of treasury bills and bonds.
- As a result of five public auctions, the equivalent of USD5.48 billion in treasury bills and USD131 million in bonds were placed during the month.
- A voluntary swap of BONAR DUAL for new dollar-linked bills (LELINK) for USD964 million was carried out on May 23.
- Debt service for the month totaled the equivalent of USD11.85 billion, of which USD9.63 billion were principal repayments and USD2.21 billion were interest payments.
- At the end of the month, the fifth payment of principal and interest on the loans derived from the 2014 Renegotiation Agreement with the Paris Club was paid. The payment was for USD1.55 billion of principal and USD325 million of interest.
- Main maturities scheduled for the month of June are DISCOUNT bonds, different BONARs in dollars, BONAR Badlar and BOTAPO.
by Nicolas Perez | Jun 10, 2019 | Budget Execution
In May, the national government recorded a primary surplus of AR$23.99 billion but a financial deficit of AR$22.38 billion, within a framework of an acceleration in the fall of revenues in real terms. Expenditures, also in contraction, had the seventh month of decline measured against inflation.
In the term January-May, expenditures increased 40.8% year-on-year. Interest on debt, transfers to provinces and economic subsidies recorded the largest expansions in the period with 91.8%, 57.7% and 52.5% YoY, respectively. Social benefits (34.9% YoY), operating expenses (33.9% YoY) and capital expenditures (-13.0% YoY) were below the increase in total expenditure.
Social benefits account for 45.7% of the increase in total expenditure, while interest payments account for 30.7%. Both explain 76.4% of the increase in expenditure in the period under analysis.
- National government revenues (40.5% YoY) again grew above expenditures (36.9% YoY), although the differential is reduced to 3.6 percentage points (p.p.) (5.2 p.p. in April).
- Personnel expenditure recorded a real fall of 14.6% YoY, in line with the retraction experienced in the salaries of several sectors (SINEP).
- After the first five months of the year, the financial balance is in deficit by AR$180.51 billion, reflecting a real reduction of 17.0% compared to the same period of the previous year.
- So far this year, the expenditure components that grew the most were Debt Interest (91.8% YoY), Transfers to Provinces (57.7% YoY) and Economic Subsidies (52.5% YoY). At the other extreme, capital expenditure contracted 13.0% YoY in nominal terms.
- The 76.3% of national government expenditure is rigid.
- At the end of May, the execution level of total expenditure reached 35.4% with respect to the current appropriation, higher than the level observed during the same period of the previous year, which reached 32.3%.
by Nicolas Perez | Jun 7, 2019 | Tax Revenue
In May, tax revenue grew 50.4% in nominal terms with respect to the same month of the previous year but declined 4.3% in real terms during the same period. This decline deepens to 6.5% when considering the first five months of the year.
Overall tax revenue has been declining in real terms for eleven consecutive months, although it began to reduce the rate of decline.
In this context, Income Tax exceeded the collection expectations for the month with an increase of 7.5% year-on-year in real terms. Together with taxes on foreign trade, it is one of the taxes whose growth exceeded inflation.
VAT contracted by 8.1% in May, although this record implies a deceleration of the falls of the last seven months.
The decline in Social Security resources deepened because of the deterioration of the labor market and the changes in the employer contributions system. However, in the fifth month of the year, Social Security resources might have found its lowest level, and in the following months the trend may consolidate.
by Nicolas Perez | May 15, 2019 | Public Debt Operations
Placements of securities and loan disbursements for USD18.52 billion were recorded during the month of April, of which 58% (USD10.83 billion) consisted of the fourth disbursement from the International Monetary Fund (IMF) within the framework of the Stand-By Arrangement (SBA). Debt service payments during the period totaled USD11.46 billion, of which 82% (USD9.38 billion) were principal payments.
In a context of high volatility, a higher yield was validated in LETES placements, whose refinancing ratio fell to 64% from 87% in April.
During the month, new bonds in dollars for USD1.5 billion were placed to cancel a debt remaining from natural gas production stimulus plans, and securities for USD369 million to satisfy a ICSID arbitration award in favor of the former concessionaire of Aguas Argentinas. On April 22, the first securities issued under the agreement with “holdout” creditors for USD2.75 billion matured.
On May 31, the fifth payment of principal and interest of the loans renegotiated with the Paris Club is due: if the minimum principal established in the agreement is paid, such payment will amount to USD 1.87 billion.
by Nicolas Perez | Apr 11, 2019 | Budget Execution
In a context of economic downturn, in March the national government had a better performance compared to the same month of the previous year, but liquefied the surplus recorded in the first two months of the year.
-
The National Government recorded in the first quarter a financial deficit of AR$42.19 billion, which implies a real drop of 47.9% compared to the same period of 2018.
-
Total revenues increased 39.4% YoY, and expenditures increased 34.0% YoY.
-
Export duties increased by 477.0.% YoY, becoming the most dynamic source of resources in the period.
-
Interest payments on public debt rose 65.1% YoY and economic subsidies doubled (107% YoY).
-
Capital expenditure remains at the same levels as a year ago, which means a fall in real terms of 33.7% YoY.
-
As of March 31, the initial budget appropriation was increased by AR$40.32 billion, AR$34.57 billion by Necessity and Urgency Decrees – DNU (86%) and AR$5.73 billion by Administrative Decisions – DA (14%).
-
The level of total expenditure implementation in the quarter was 19.1%.
