Nicolas Perez - Oficina de Presupuesto del Congreso

GENERAL DESCRIPTION OF THE CONTENTS OF THE 2021 NATIONAL BUDGET BILL

by Nicolas Perez | Oct 14, 2020 | Budget Law

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).

PUBLIC DEBT OPERATIONS – SEPTEMBER 2020

by Nicolas Perez | Oct 14, 2020 | Public Debt Operations

In September, the restructuring operations of foreign currency securities issued under foreign
legislation (Law 27,544) and local legislation (Law 27,556) were settled, which involved
cancellations of eligible securities for USD108.1 billion and placements of new bonds for
USD110.9 billion.
Excluding these operations, there were placements of securities and loan disbursements for the
equivalent of USD4.7 billion, of which AR$252.8 billion (USD3.4 billion) were auctions of
marketable securities in pesos. On the other hand, the equivalent of USD3.1 billion of principal
was paid, mainly due to maturities of Treasury bills in pesos. Likewise, interest payments were
made for the equivalent of USD447 million, of which 76% were in pesos.
Debt service maturities for the equivalent of USD3.86 billion are estimated for October, totaling
USD17.06 billion until the end of the year (approximately USD8.4 billion if holdings within the
public sector are excluded).

REPORT ON SPECIAL NATIONAL PENSION REGIMES FOR TEACHERS, RESEARCHERS AND WORKERS OF LUZ Y FUERZA AND OF YACIMIENTOS CARBONÍFEROS DE RÍO TURBIO

by Nicolas Perez | Sep 16, 2020 | Employment and Social Security

The Law of Social Solidarity and Productive Reactivation within the framework of the Public
Emergency provides for a review of the special pension regimes to formulate a proposal for
amendment to the National Congress.
The analysis of five of the seven special pension regimes (non-university teachers; university
teachers; researchers and scientists; workers of Yacimientos Carboníferos Fiscales and of Luz
y Fuerza) shows that their average benefit is significantly higher than the general average and
explains the 27% of the contributory pension deficit, although they accounted for only 10% of
the pension expenditure in March 2020.

These special regimes belong to the public sphere and their mobility is linked to the
evolution of the current salary with less prevalence of inflation as is the case in the
general regime. For this reason, in the last two years, the deficit of the general regime
has gained relative weight compared to the others.
However, all Special Regimes included in this projection would be increasing their
contributory deficit during 2020.
The benefit of non-university teachers doubles the general regime’s average. That of
researchers and workers of Yacimientos Carboníferos Fiscales quadruples it.
The pension benefits guarantee between 70% (Luz y Fuerza) and 85% (researchers and
scientists) of the salary at the time of retirement, but the different adjustment formulas
only guarantee the stability of this parameter in some regimes.
Special benefits should be reduced between 29 and 41% to have the same equivalence (salary replacement) of the general regime.
From 2018 to last June, all regimes analyzed show a negative real mobility, ranging from a 10.92% decrease in the general regime, to a 23.69% drop for benefits for Luz y Fuerza.

Since the government is the one who employs and covers the deficit, to close this gap it would
not be useful to increase employer contributions or the retirement age, a measure that usually
takes effect only in the medium term. A possible more immediate fiscal impact could be
achieved by raising personal contributions or establishing a ceiling equivalent to the maximum
amount of the general regime.

FISCAL IMPACT OF THE BILL ON INTERNET ACCESS FOR BENEFICIARIES OF THE UNIVERSAL CHILD ALLOWANCE (S-1566/20)

by Nicolas Perez | Sep 15, 2020 | Cost Estimates

The purpose of Bill S-1566/20 is to guarantee Internet access to children and adolescents who
are beneficiaries of the AUH (Universal Child Allowance) through the granting of 5GB (mobile
data) per month by the companies providing mobile telephone service for cell phone lines
whose holder is a beneficiary of the AUH.

It is estimated that the Bill will have a fiscal cost of AR$1.28 billion per month.
Assuming that the benefit will be effective as from October of the current year and will remain in
force until December 31 (in accordance with the provisions of the Bill), the total cost of the
measure would amount to AR$3.86 billion in 2020.

FISCAL COST OF BILLS S-1120/20 Y S-1216/20 (COMMITTEE REPORT) – LEY YOLANDA

by Nicolas Perez | Sep 14, 2020 | Cost Estimates

The purpose of the Bills, jointly known as Ley Yolanda, is to guarantee comprehensive
environmental training, with a sustainable development perspective and emphasis on climate
change, for people working in the public sector, based on the merger of the guidelines
established by Bills S-1120/20 and S-1216/20.
The fiscal cost related to the implementation of the proposed training is estimated by calculating
the costs of three sets of actions:

Development, dissemination and distribution of the general guidelines and
training certification.
Training preparation (development and adaptation of programs, preparation
of contents, definition of materials and organization of learning activities).
Provision of training to agents of the National Non-Financial Public Sector
(NFPS).

Based on the above, it is estimated that the fiscal cost of this measure would amount to
AR$254.9 million.

FISCAL IMPACT OF THE DRAFT OPINION ON THE ELECTRONIC MEDICAL RECORD BILL

by Nicolas Perez | Sep 11, 2020 | Cost Estimates

The national scope of the Bill being promoted to establish a Single Electronic Medical Record System (EMR) involves cultural, organizational, technical, and professional challenges to be overcome in the eHealth path in which our country, like most of the countries of the region and the world, finds itself.

The design, development and implementation strategy adopted to carry out this Single EMR System will determine the requirements in terms of human resources, infrastructure, and technological equipment, as well as those related to the management of any necessary
changes within the health institutions, and the population, in their capacity as holders of their Electronic Medical Record.

Once these aspects have been addressed, it will be possible to evaluate the fiscal impact of the Bill being promoted, considering that the experiences in other countries and in some institutions in our country show that guaranteeing sustainability and continuity of the initiative over time represents a great challenge.