The 6 keys to understand Sergio Massa’s measurements

August 04, 2022 22:09 pm | Reading time: 6 minutes
August 04, 2022 22:09 pm
| Reading time: 6 minutes
August 04, 2022 22:09 pm | Reading time: 6 minutes
August 04, 2022 22:09 pm
| Reading time: 6 minutes

If you only have a few seconds, read these lines:

  • The Minister of Economy announced an economic plan that points to fiscal order, trade surplus, strengthening of reserves and social development with inclusion, as he described.
  • The announcement included measures related to the fiscal deficit, Treasury financing, subsidies, pensions, international reserves and the trade balance.
  • In this note we tell you what the current scenario is and what should happen to the different variables that Massa mentioned to meet the official objectives.

The new Minister of Economy of the Nation, Sergio Massa, announced on Wednesday a set of measures that aim to promote fiscal order, sustain the trade surplus, strengthen international reserves and generate development with social inclusion, as he himself described.

Among other things, the head of the Palacio de Hacienda affirmed that the goal of 2.5% of the primary deficit agreed with the International Monetary Fund (IMF) will be met; a “reinforcement” will be granted in retirement assets; it will begin with the scheme to remove subsidies on electricity and gas rates, with a limit on consumption for households that maintain the benefit; and different measures will be implemented to strengthen international reserves.

In this note we tell you 6 keys to understand the measures of Massa. These are focused on what the current scenario is and what should happen with the different variables mentioned by the new minister to meet the official objectives.

2.5% tax target: what is needed to meet it?

The Minister of Economy announced that will be met “with the goal of 2.5% of the primary deficit [N. de la R.: es decir, sin contar los pagos de intereses de deuda] of the national public system established by the Budget”.

It should be remembered that the Government committed to the IMF to reduce the fiscal deficit to 2.5% of the Gross Domestic Product (GDP) in 2022 (in 2021 it was 3%); to 1.9% by 2023; and 0.9% by 2024. Translated into pesos, this means -according to the agreement between Argentina and the IMF- that by the end of 2022 the primary deficit must be equal to or less than $1,758,600 million.

In June -the latest data available- the fiscal deficit was $321.6 billion and, with it, the accumulated figure for the first semester reached $800.7 billion. Thus, the IMF goal was met, according to official information.

Alejandro Giacoia, an economist at the consulting firm Econviews -directed by Miguel Kiguel, a former official at the Ministry of Economy during the Presidencies of Carlos Menem and Fernando De la Rúa-, told checked: “The margin that remains to reach a deficit of 2.5% of GDP is small, and it will be difficult to achieve, especially if we take into account that in the second half of the year the deficit is usually high”.

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The economist pointed out thatthe only important measure that would help in this regard would be the removal of energy subsidies”. And he completed: “On the other hand, A new bonus for retirees was announced in order to rebuild their income. This type of expense clearly makes it even more difficult to meet the objective”.

No more transitory advances from the Central Bank

The new minister indicated that “the balance of Treasury advances will not be used for the remainder of the year” and that there will be “a refund for $10 billion to the Central Bank”.

What are transitory advances? The Central Bank of the Argentine Republic (BCRA) can make money transfers (called “temporary advances”) to the national government to meet financing needsin accordance with article 20 of the Organic Charter of the BCRA.

In the agreement with the IMF, goals were also established in relation to reducing the monetary assistance from the Central Bank to the National Treasury, with goals of 1% of GDP by 2022; 0.6% for 2023 and 0% for 2024.

Financing to the Treasury by the BCRA through transitory advances was $435,051 million in June, just below the goals set in the agreement ($438,500). While, As of July 29, the entity had drawn $630,051 million, and with this it exceeded the goal of $613,300 for the third quarter.

If the reimbursement of $10 billion announced by Massa is fulfilled, it will still be necessary to return another $7 billion. Meanwhile, if the government finally does not request more transitory advances (as the minister also promised), the annual goal of $705.2 billion established with the IMF will be met.

Tariff subsidies and consumption ceiling

The head of the economic portfolio reported that “almost 4 million Argentine households” did not request to maintain energy subsidies, while “among the more than 9 million households” that did request it, “savings for consumption” will be promoted.

Sources from the Secretariat of Technological Innovation of the Headquarters of the Cabinet of Ministers reported that, as of August 3, 9.4 million households were registered to receive the subsidy, of which 56% corresponds to rate 2 (low income) and 38% to rate 3 (medium income).

These segments would continue to receive subsidies, althoughThe novelty in Massa’s announcements was that a consumption limit will be established (for example, up to 400 kWh/month in electricity) and the water service will also be included as of September, although official details are lacking in this regard. A cap on gas consumption will also be established, but what that level will be has not yet been made official..

The spokeswoman for the national government, Gabriela Cerruti, held at a press conference that 80% of the more than 9 million households that will continue to receive subsidies spend less than 400 kWh per month.

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For his part, the chief economist of FIEL Santiago Urbiztondo, a specialist in energy issues, raised with checked what “average residential consumption is close to 400 kWh/month in Greater Buenos Aires (GBA), while the country average is lower, around 300 kWh/monthalthough it varies between provinces, seasonally and between families with similar incomes”.

Although it is not possible to establish an estimate due to the lack of precision in the information, in a first reading it is noted that the ceiling announced by the minister is in line with the GBA average and above the country level.

International reserves: how did they evolve?

During the announcement of the set of measures, Massa anticipated that it was agreed “an export advancement scheme with value chains of fishing, agriculture, mining and other sectors” for which “a total of US$ 5 billion will enter in the next 60 days, which will go on to increase the reserves of the Central Bank”.

He also reported that the Government is “advancing in the disbursement of US$ 1,200 million with international organizations” and that “in the next few days” A disbursement of “US$750 million” will be signed with the Andean Development Corporation (CAF).

The Minister also assured that the Government is “evaluating 4 REPO offers [N. de la R.: del inglés, Repurchase Agreement, acuerdo de recompra) para el fortalecimiento de reservas y recompra de deuda soberana” de “3 instituciones financieras internacionales y un fondo soberano”, aunque no dijo cuáles.

El nivel de reservas internacionales informadas por el Banco Central terminó en junio (último dato consolidado disponible) en los US$ 42.787 millones, mientras que el pico máximo anual se registró en marzo, cuando alcanzaron los US$ 43.137 millones.

Ahora bien, las reservas netas calculadas por consultoras privadas terminaron en junio cerca de los U$S 2.770 millones, mientras que el dato provisorio del nivel actual es de menos de US$ 2 mil millones.

Tras los anuncios, la sociedad de bolsa Portfolio Personal de Inversiones (PPI) indicó que los desembolsos de organismos internacionales y de la CAF “engrosarán el stock de reservas netas (si bien se toma de deuda del Tesoro) y servirán para seguir interviniendo en el mercado de cambios en meses donde el sector agropecuario se retira, pero no soluciona el problema de fondo”.

Jubilaciones vs. inflación

Sobre el objetivo “de generación de desarrollo con inclusión social”, el titular del Palacio de Hacienda adelantó: “El 10 de agosto vamos a anunciar el índice de movilidad jubilatoria pero con un refuerzo”. Es decir, un bono adicional.

Con el aumento otorgado en junio de 2022, la jubilación mínima ascendió a $ 37.500 y se ubicó un 0,7% por debajo del poder de compra (es decir, incorporando el efecto de la inflación) que poseía en igual mes del año último.

En el acumulado anual, en tanto, los haberes mínimos de junio se ubicaron un 5,1% por debajo de lo percibido en diciembre de 2021, pero la pérdida será mayor si se tiene en cuenta que el próximo incremento será en septiembre y aún restan por conocerse los datos de la inflación de julio y agosto.

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En abril último, el Gobierno nacional otorgó un bono de $ 6 mil para aquellos jubilados que cobran un haber mínimo, y en mayo último se entregó un segundo beneficio de $ 12 mil, en este caso para todos los beneficiarios con percepciones por debajo de 2 jubilaciones mínimas.

No obstante, como explica en esta nota Eugenio Semino, defensor de la Tercera Edad de la Defensoría del Pueblo de la Ciudad, los bonos “no deben considerarse porque no son remunerativos, no se acumulan en los siguientes meses y no alcanzan a todos los beneficiarios del sistema”.

En tanto, el haber medio se ubicó en junio último en $ 59.122, una cifra similar (descontando el efecto de la inflación) a igual mes del 2021 y un 5% inferior con respecto a diciembre último.

Medidas de comercio exterior

Massa anunció, además, 4 medidas para “aumentar las exportaciones y evitar abusos en las importaciones”. ¿Cómo evolucionó la balanza comercial argentina en los últimos meses?

De acuerdo con los últimos datos oficiales del INDEC (que llegan hasta junio de 2022), en los últimos meses las importaciones aumentaron en mayor medida que las exportaciones. En 2021 la compra de bienes del extranjero subió un 49,2% en dólares, mientras que las ventas al exterior se incrementaron un 41,9%.

En los primeros 6 meses de este año, la tendencia se profundizó: con respecto al mismo período de 2021 las importaciones aumentaron 44,3% y las exportaciones, 25,3%. En junio, en tanto, se registró el récord histórico de importaciones, con compras por US$ 8.547 millones. Ese mes se registró el primer saldo mensual negativo desde diciembre de 2020.

De este modo, si bien hasta junio de 2022 la Argentina mantuvo una balanza comercial positiva de US$ 3.079 millones, la misma se redujo un 54% con respecto a igual período de 2021, cuando el saldo favorable fue de US$ 6.773 millones.


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