Nicolas Perez - Oficina de Presupuesto del Congreso

ANALYSIS OF BILL “BASES AND STARTING POINTS FOR THE FREEDOM OF ARGENTINES” – REPORT 2 – PROMOTION OF REGISTERED EMPLOYMENT (SEC. 214-220)

by Nicolas Perez | Jan 13, 2024 | 25-PE-2023_ENG, Cost Estimates

With the purpose of promoting registered employment, these sections offer incentives to the employers that join the regime within 90 days after the implementation of the law, by forgiving them at least 70% of the amounts owed for lack of contributions to any legal subsystem, with the elimination of fines, legal actions and other penalties and the removal of labor law violations from the records.

The fiscal impact of the regularization regime depends on the number of employees that are formalized, a number that is still unknown.
There will be a cost for the Government in the short term and an eventual improvement in revenues for the Social Security System resulting from this formalization.
It is not possible to prepare a comprehensive estimate without precision on the number of workers to be formalized or the stock of debt for contributions due to deficient records.
In 2023, the contributions for each registered labor relationship amounted to approximately ARS1.92 million, of which ARS1.79 million were resources that remained in the public sector.
Last year, fines for Social Security infractions amounted to ARS1.813 billion, equivalent to 0.001% of the GDP.

ANALYSIS OF BILL “BASES AND STARTING POINTS FOR THE FREEDOM OF ARGENTINES” – REPORT 1 – PENSION BENEFITS ADJUSTMENTS (SEC. 106)

by Nicolas Perez | Jan 13, 2024 | 25-PE-2023_ENG, Cost Estimates

Section 106 of the Bill suspends the mobility of quarterly adjustments for pension benefits and family allowances, subject to the evolution of salaries and ANSES (National Social Security Administration) resources and grants the Executive Branch the power to set the updates without defining a parameter to be used. This prevents a precise estimate of the fiscal impact but allows describing possible scenarios according to the criteria adopted by the Executive Power in the future.

If there were no increase during the year, pensions would suffer a 69.9% deterioration in their purchasing power, and social security benefits would fall from 6 to 4.5% of the GDP. Half of the beneficiaries would be indigent and 33% of them would be in poverty.
If there were adjustments only for the lowest income beneficiaries, the loss for those who receive three or more minimum pensions would be 69.9%. ANSES would have a surplus of 1.2% of GDP and social security benefits would represent 5% of GDP.
If all pension benefits were increased in the same proportion according to the evolution of ANSES funds, the average loss would be 19%. If this strategy were to include a priority for those with lower incomes, the loss for the rest would rise to 40%.
If all pension benefits were increased by inflation, there would be no loss of purchasing power and the ANSES deficit would rise to 0.8% of GDP.
From the application of the current adjustment formula (2021) until December 2023, minimum pensions that received full bonuses suffered a loss of purchasing power of 3.6% and the rest of 36.5%.
The decoupling between prices and pension benefits began in July 2022, when inflation accelerated.

PUBLIC DEBT OPERATIONS – CUMULATIVE 2023

by Nicolas Perez | Jan 9, 2024 | Public Debt Operations

As of December 31, 2023, the debt stock in pesos amounted to ARS83,677.668 billion and that in foreign currency totaled USD264.968 billion.
During the year, debt in pesos had a net increase of ARS60,453.903 billion due to the combined effect of valuation adjustments, net debt issuance and interest capitalization.
Debt with the IMF amounted to approximately USD40.899 billion at year-end, which implies a reduction of USD5.1 billion with respect to the previous year-end.
During 2024, payments to the IMF are expected to total the equivalent of USD7.463 billion.
Net financing from the Central Bank to the Treasury totaled ARS1,698 billion in 2023 (ARS1,298 billion from temporary advances and ARS400 billion from profits).
Estimated debt services for 2024 in domestic currency total ARS94,103.633 billion and in foreign currency are estimated at USD33.090 billion.
Maturities in foreign currency for January are estimated at the equivalent of USD12.080 billion, of which USD8.104 billion are repayments of BCRA (Central Bank) bills and USD1.967 million for the IMF stand-by loan.

PUBLIC DEBT OPERATIONS – CUMULATIVE 2023

NEW MONITORS ON NATIONAL RESOURCES

by Nicolas Perez | Jan 3, 2024 | Activities

The Argentine Congressional Budget Office (OPC) is working on the preparation of new monitors related to the budgetary activity of the National Government, which will be periodically updated.

One of them will detail the monthly evolution of current and capital transfers from the Central Government to non-financial state-owned enterprises of the National Government.

The data, expressed in a synthetic and graphic manner, may be consulted as a consolidated report or by company to track those transfers.

The monitor on state-owned enterprises will be the first to be published by the OPC in 2024.

ANALYSIS OF NATIONAL GOVERNMENT BUDGET AMENDMENTS FOR 2023

by Nicolas Perez | Dec 28, 2023 | Budget Amendments

The Budget Law passed by the National Congress is amended during the year in accordance with the delegation of powers arising from the regulations in force. Within this framework, it is important to analyze those amendments to provide updated data on the budgetary dynamics throughout the fiscal year.

To this end, these periodic reports focus on the analysis of budgetary amendments made by Administrative Decisions of the Chief of Cabinet of Ministers (JGM) or by Necessity and Urgency Decrees (DNU).

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – NOVEMBER 2023

by Nicolas Perez | Dec 14, 2023 | Budget Execution

During the first eleven months of the year, the financial deficit fell by 7.6% YoY due to a reduction in total expenditures (4.1% YoY) that exceeded the fall in revenues during that same period (3.1% YoY).

The primary and economic deficits were also reduced.
The resources of the National Government that contracted the most were Export Duties (62.3% YoY), basically because of the fall in agricultural exports due to the drought, and Income Tax (15.3% YoY), due to the modality for settling the tax and the exclusion of salaried employees from the taxable base.
Transfers to provinces grew 5.6%. Until July they fell 28.0% YoY, but thereafter they grew every month: 27% YoY in August, 70.3% YoY in September, 57.0% YoY in October and 45.7% YoY in November.
Energy subsidies (-28.4% YoY), family allowances (-30.7% YoY) and pensions (-4.4% YoY) were those items that contributed most to the reduction in primary expenditure.
Other economic subsidies and transfers to finance capital expenditures were the expenditure items that increased the most.
Interest payments increased by 1.2% YoY and attenuated the reduction in total expenditures.