10/26/2020 3:39 PM
Updated 10/26/2020 3:39 PM
Martín Guzmán needs pesos.
The Minister of Economy not only seeks to renew what expires but to obtain "net financing", that is,
what is left over.
The plan is to depend less on the Central Bank and the monetary issue that has been covering
the gap in the fiscal accounts
So far this year, however, 94% of the deficit has been covered with the "little machine".
This is how
Nadín Argañaraz, from the IARAF, explains
: "The fiscal deficit until the month of September inclusive was 6.4% of GDP and the issuance of pesos from the BCRA to the National Treasury was equivalent to 6% of GDP. 94% of the deficit was financed with the issuance of pesos. "
2020 would end with 80% of the fiscal red financed with the help of the monetary entity.
"The national government expects to close the year with a fiscal deficit of 10.3% of GDP. If the issuance of primary pesos is analyzed, it would reach 8.3% of GDP ($ 2,250,000 million). This government forecast it would confirm the intention of
a greater use of debt in pesos in the last months of the year,
A historical review shows the exponential growth in issuance in 2020, about four times the average of recent years.
"Between 2010 and 2017,
the average issuance for direct assistance from the BCRA was equivalent to 2% of GDP
, reaching a maximum of 3.2% of GDP in 2014. In 2018, direct assistance was significantly reduced, being 0 2% of GDP. But in 2019 it grew again hand in hand with the financial imbalance. "
As for the projections for next year, they are ambitious.
If the interest on the debt is added, the fiscal deficit would decline from 10.3% of GDP in 2020 to
5.7% in 2021.
"Considering both the distribution of profits and the anticipated temporary advances, the Government expects to receive a transfer from the BCRA equivalent to 3.2% of GDP. This emission ratio marks a huge decrease compared to 2020, but what is relevant is to relate it to the deficit total expected. When making the relationship, it turns out that the government expects
an issue of pesos by the BCRA equivalent to 56% of the deficit,
"they comment in the IARAF.
From Consultatio Plus they look at the complicated curve that is the last two-month period of the year and propose: "The challenge of fiscal deterioration in December will imply an additional effort in terms of financing sources. A deficit of this magnitude will require the BCRA to test its legal limits in terms of temporary advances and profit transfers, which
could inject liquidity for 50% of the monetary base.
And they point out: "Even if Finance cannot obtain net financing, the BCRA could finance the budgetary needs of the last two-month period
without 'hitting' its legal limits, but it will be very close.
Obviously, it will be necessary to resort to sterilization tools to avoid an imbalance higher" .
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