Nicolas Perez - Oficina de Presupuesto del Congreso

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – JULY 2022

by Nicolas Perez | Aug 12, 2022 | Budget Execution

With an increasing expenditure in energy subsidies and some social programs, during the first seven months of the year the National Government recorded a primary deficit of ARS1,538.364 billion, 71.0% higher than that of the same period of the previous year.

Including debt interest payments, the financial deficit was 41.1% higher at ARS2,202.759 billion.
Total revenues fell by 0.4% in real terms, whereas expenditure increased by 7.7%.
The deterioration in revenues was mainly due to non-tax resources such as the Solidarity Contribution and capital transfers.
Primary expenditure rose 8.3%, primarily because of energy subsidies and social programs.
As of July 31, total expenditures amounted to ARS8,661.651 billion, equivalent to 52.7% of the current budget appropriation.
Social programs exceeded that proportion (66.6%). On the other hand, other economic subsidies had a much lower execution than the average expenditure (28.6%).
The execution of the Potenciar Trabajo program (83.6%) and Food Policy (67.2%) stands out.
During the first seven months of the year, the extended budget appropriation grew by ARS5,649.535 billion, with the largest increase concentrated in pension benefits.

PUBLIC DEBT OPERATIONS – JULY 2022

by Nicolas Perez | Aug 11, 2022 | Public Debt Operations

Securities totaling ARS893.848 billion were placed in two auctions.
Net financing of Temporary Advances for ARS195 billion was provided.
Amortizations were paid to the IMF for USD1.962 billion.
Interest was paid on bonds issued in the 2020 debt restructuring for USD690 million.
August debt maturities are estimated at USD1.499 billion, including maturities within the public sector.

ANALYSIS OF NATIONAL TAX REVENUE – JULY 2022

by Nicolas Perez | Aug 5, 2022 | Tax Revenue

Tax revenues amounted to ARS1,745.178 billion in July 2022, which implied a growth of 87% year-on-year (YoY). Adjusted for inflation, it expanded 11.1% YoY.

The recovery in the level of activity since March 2021, the increase in international commodity prices and the increase in the nominal exchange rate (33.5% YoY) contributed favorably to this result.

Among tax resources, the increase in PAIS Tax collection in real terms because of the return to foreign travel as COVID-19 restrictions are eliminated stands out
Income Tax and Wealth Tax showed significant increases because the first installment of the payment facilitation plan for Individuals became effective this month, together with the remainder of tax returns not filed in June because of the precautionary measure of suspension of payments.

In addition, for Income Tax, the second installment of payment facilities for the tax returns of companies closing in the month of December stands out. VAT also recorded a significant growth in year-on-year terms because of the higher economic activity compared to 2021.

Foreign Trade duties continued to decline due to negative weather effects and to roadblocks and demonstrations by self-organized carriers that prevented trucks from entering the ports.

On the other hand, Social Security contributions continued to show high year-on-year growth.

ANALYSIS OF THE 2021 NATIONAL GOVERNMENT FINANCIAL REPORT

by Nicolas Perez | Aug 4, 2022 | Financial Report

Both the Central Government and Non-Financial Public Sector had a deficit during fiscal year 2021, although with slight improvements with respect to those recorded in 2020.

Excluding the contributions of the Central Bank to the National Treasury, the primary deficit of the National Government reached ARS2,112.859 billion, equivalent to 4.6% of the Gross Domestic Product (GDP). On the other hand, the financial result was negative at ARS2,883.501 billion, 6.2% of GDP.

Nineteen budget amendments were made, three of them through decrees of necessity and urgency, which increased the financial deficit of the national government by ARS 938.004 billion.
The primary and financial deficits were 67.2% and 44.2% higher than those projected in the budget.
Special Drawing Rights and the Extraordinary Solidarity Contribution (1.4% of GDP), largely drove the deviation of revenues received with respect to what was projected in the Budget Law (24.9%).
Expenditures also exceeded forecasts by 28.2%, mainly due to social programs, which exceeded the initial appropriation by 128.4%. In addition, energy subsidies were 58.8% higher than projected (ARS387.597 billion).
Pension benefits fell by 4.4% year-on-year (YoY) in real terms. On the contrary, capital transfers and energy subsidies headed the year-on-year increases, with rises of 187.0% YoY and 60.2% YoY, respectively.
The financial deficit of the non-financial National Public Sector (net of BCRA profits) stood at 4.1% of GDP, moderated by the surplus of trust funds.

ANALYSIS OF THE 2021 NATIONAL GOVERNMENT FINANCIAL REPORT

Incentive to the Argentine Construction and Production Investment – JULY 2022

by Nicolas Perez | Aug 3, 2022 | Cost Estimates

This report analyzes Bill CD 3/2022 on Incentive to the Argentine Construction and Production Investment and evaluates the possible impact on the National Government’s accounts.

The Bill proposes to reinstate the regime established by Title II of Law No. 27,613, ” Standardization Program to Reactivate the Argentine Federal Construction” and to create a bridge to employment, with the transformation of social plans and social security benefits.

Based on OPC’s estimates, the fiscal impact of what is explicitly specified in the Bill would represent an increase in revenues of ARS 4.459 billion in 2022 and 2023, as from the enactment of the law.

Although the bridge to employment proposed in the Bill does not generate additional costs or savings for the National Government, it would have a low potential coverage in operational terms.

ANALYSIS OF PUBLIC INVESTMENT BUDGET EXECUTION – FIRST HALF 2022

by Nicolas Perez | Jul 22, 2022 | Public Investment

Public Investment (PI) executed by the National Government during the first half of 2022 amounted to ARS475.813 billion, which represents a growth in real terms of 2.0% year-on-year (YoY) and an execution of 33.3% compared to the current appropriation. The variation registered in relation to the execution of the first half of 2021 is explained by the Real Direct Investment (RDI) (ARS144.770 billion), which showed a year-on-year growth of 9.4% and managed to offset the 1.0% YoY drop in Capital Transfers (CT) (ARS331.043 billion).