Analysis of National Public Investment projected in the 2020 Budget Bill

Analysis of National Public Investment projected in the 2020 Budget Bill

The Budget Bill submitted to Congress in September 2019 estimates a public investment amount for the national government at AR$232.21 billion, with an estimated nominal increase of 19.6% year-on-year with respect to the 2019 closing projection made by the Ministry of Finance.

Public investment of the entire National Public Sector (NPS) -including government-owned companies, trust funds and other entities- would amount to AR$318.02 billion, according to the Message 2020, which is equivalent to 4.9% of the total expenditure of the NPS. This implies a drop of 10.9% year-on-year in relation to what was projected for this year.

The largest increase is in capital transfers made by the national government to other entities or jurisdictions to carry out works or purchase goods, which increased 32.4%. Real direct investment (works projects and equipment acquisition) only increased by 6.1% YoY.

The geographical breakdown of these transfers shows a concentration in the Pampas Region, basically in the Province of Buenos Aires (18%) and in the Autonomous City of Buenos Aires (10.3%), jurisdictions in which half of the real direct investment is concentrated.

The Bill provides for the execution of 995 projects to be carried out by the national government for an average amount of AR$80 million each. The total amount shows a decline since 2011: from 0.68% of GDP in 2011 to 0.25% in 2020.

The largest amounts are allocated to railway works, such as the improvement of the Belgrano Cargas Railway, which involves several jurisdictions and would demand AR$5 billion, and to the laying of highways, including Route 19 connecting San Francisco with Córdoba or Route 8 connecting Pilar with Pergamino.

In the rest of the Public Sector, the main direct investments would be carried out by government-owned companies: Nucleoeléctrica Argentina S.A. (36.9% of the total), and Integración Energética Argentina S.A. – Ex- ENARSA (30.3%).

Report on the Consolidated Budget of the National Public Sector – 2019

Report on the Consolidated Budget of the National Public Sector – 2019

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.

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