Nicolas Perez - Oficina de Presupuesto del Congreso

PUBLIC DEBT OPERATIONS – DECEMBER AND CUMULATIVE 2021

by Nicolas Perez | Feb 10, 2022 | Public Debt Operations

In December, government securities were placed for a total amount equivalent to USD1.369 billion. Two market auctions were held, resulting in the placement of different instruments for ARS484.051 billion.
During 2021, the Treasury conducted 33 auctions, through which different instruments were placed for a total of ARS4.80 trillion and an average term of 323 days.
During the year, there were gross debt issuances (placements of securities, loan disbursements, capitalizations) for USD95.488 billion and capital repayments for USD71.453 billion.
Nearly two thirds of the gross issuances of the year were made with authorizations included in the Budget Law 27,591 of 2021: 18% were placements of securities maturing in 2021 and 48% were issuances of instruments maturing after 2021. Another 24% of the total were Temporary Advances from the BCRA (Central Bank of the Argentine Republic).
Including transfers of profits, which do not constitute debt, BCRA’s net assistance to the Treasury totaled 4.6% of the estimated GDP for 2021, of which 2% of GDP was explained by the net placement of Temporary Advances.
Debt maturities for January are estimated to total the equivalent of USD7. 978 billion. The payment of interest on bonds in foreign currency for the equivalent of USD693 million stands out.

PUBLIC DEBT OPERATIONS - DECEMBER AND CUMULATIVE 2021

TAX BURDEN ON PRODUCTIVE ACTIVITY – SITUATION IN THE GREATER BUENOS AIRES FIRST RING

by Nicolas Perez | Feb 9, 2022 | Tax Policy and Fiscal Federalism

The purpose of this study is to continue with the evaluation of the consolidated tax burden on a group of economic activity sectors in different regions of the country. This time, the analysis was focused on the municipalities of what is called the first ring (cordón) of the Greater Buenos Aires.

Under certain assumptions and without including some taxes such as Taxes on Fuels or Export Duties, the average tax burden is equivalent to 12.3% of the companies’ turnover.

On average for the sectors and districts analyzed, the tax burden is 12.3% of annual turnover, varying between 8.6% and 16.7%.
Tax impact is substantially higher than average in the hotel industry, with significant differences depending on whether the company is an SME or a large company.
At the other extreme is the meat processing sector. This same result was obtained in the previous analysis of other 30 districts.

TAX BURDEN ON PRODUCTIVE ACTIVITY - SITUATION IN THE GREATER BUENOS AIRES FIRST RING

ANALYSIS OF NATIONAL TAX REVENUE – JANUARY 2022

by Nicolas Perez | Feb 7, 2022 | Tax Revenue

Tax revenue amounted to ARS1.171,943 trillion in January 2022, which implied a growth of 51.6% year-on-year (YoY). Adjusted by inflation, it expanded 0.9% 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 (21% YoY) contributed favorably to this result.
Among tax resources, increases in real terms in Income Tax, Tax on Credits and Debits and Internal Taxes stand out. Social Security resources showed a good performance.

January 2021 is a high base of comparison for VAT, because of income from payment facilities last year and compensations made to other taxes during this year, which implied a real year-on-year drop in DGI VAT.

On the other hand, Export Duties fell in nominal (and real) terms in January because of a decrease in export records, possibly due to the uncertainty caused by the climatic situation on the outcome of the current crop year.

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – YEAR 2021

by Nicolas Perez | Jan 31, 2022 | Budget Execution

Including the Special Drawing Rights received from the IMF and the collection of the Solidarity Contribution, during 2021 the National Government revenues grew by 21.2% in real terms year-on-year, much higher than the increase in primary expenditure, which grew by 5.6% with uneven behavior by item.

This dynamic between revenues and expenditures implied an improvement in the primary balance for 2021, which went from a deficit of 7.3% of GDP in 2020 to a deficit of 4.6% in 2021.

All results were negative, but the deficits were lower than those recorded in 2020.
If SDRs and Solidarity Contribution resources were discounted, total revenues would have shown an increase of 11.4% YoY.
Tax revenues totaled ARS4.781 trillion, an increase of 20.7% YoY. Export Duties grew 67.1% YoY because of a combination of the improvement in the exchange rate and the increase in quantities and prices of products of the soybean complex.
Pension benefits fell by 4.3% in real terms during the year because of the mobility formula in force. This item records four consecutive years of decline, because pension benefits do not offset inflation. The share of social security expenditure fell from 9.8% of GDP in 2017 to 8.4% in 2021.
On the contrary, transfers for social programs (15.9% of total social benefits) showed a significant rise in the last two years and their share increased from 0.6% of GDP in 2019 to 1.8% in 2021.
Economic subsidies increased by 30.1% YoY in real terms, a percentage that doubles for energy subsidies and has even steeper rises for subsidies to the gas sub-sector.
The current appropriation increased by 31.0% with respect to the initial appropriation for fiscal year 2021 (ARS2,605.412 billion), mainly driven by the increase in social benefits.
As of December 31, 19 budget amendments were approved, which increased the deficit by ARS938.004 billion.

ANALYSIS OF PUBLIC INVESTMENT BUDGET EXECUTION – YEAR 2021

by Nicolas Perez | Jan 24, 2022 | Public Investment

Public Investment (PI) executed by the National Government in 2021 amounted to ARS1.108 trillion, which represents a growth in real terms of 148.5% year-on-year (YoY) and an execution of 92.2% compared to the current appropriation The increase with respect to 2020 is explained, firstly, by Capital Transfers (CT) (ARS859.259 billion), which recorded a growth of 187.4% YoY, and secondly, by Real Direct Investment (RDI) (ARS249.364 billion), which showed a real increase of 69.5% YoY. Public investment as a percentage of Gross Domestic Product (GDP) reached its highest value in the last five years in 2021, at 2.4%.

ANALYSIS OF PUBLIC INVESTMENT BUDGET EXECUTION - 2021

ANALYSIS OF NATIONAL TAX REVENUE – YEAR 2021

by Nicolas Perez | Jan 21, 2022 | Tax Revenue

Tax revenue totaled ARS11.005 trillion in 2021, which implied a growth of 65.9% year-on-year (YoY). Adjusted for inflation, it expanded 11.9% YoY, exceeding the expected growth in the level of activity.

Among the tax resources, the increases in real terms in VAT (14.8% YoY), Tax on Credits and Debits (11.2% YoY) and Income Tax (8% YoY) stand out. Export Duties grew 69.6% YoY and Social Security resources 4% YoY.

The main factor behind the increase in tax revenue in real terms is the recovery in economic activity after the year 2020 which was marked by the restrictions imposed to mitigate the effects of Covid-19, along with the increase in international prices of raw materials exported by our country.