Foreign trade linked to services continues to be an exit door for foreign currency for the Central Bank, which so far this year has accumulated a net loss of more than US$2,425 million.
The deficit of the Central Bank Exchange Balance Services account (BCRA) continues to grow month by month and Last August, it registered the highest level since November of last year, adding 614 million dollars. In this way, the imbalance linked to international service transactions has accumulated more than US$2,425 million so far in 2024, explaining, in part, the outflow of foreign currency from the BCRA.
Last August’s red was almost 50% higher than a year ago and was the result of net expenses for Travel, tickets and other card payments for US$571 million, Other concepts for US$184 million and Freight and insurance for US$101 million. As usual alone Net income from Professional and Technical Business Services partially offset the net revenue of US$242 million.
Services account: the balance of the year
When analyzing the accumulated annual gross income and expenses of services by concept and its comparison with the same period of the previous year, it emerges that The improvement in the balance of the services account is, mainly, the result of the drop in gross expenses, especially in freight and insurance. On the side of the The best income came from Travel, tickets and other card payments, which reported an increase of 38% year-on-year in the accumulated January-August period to $1,697 million while that of Business, Professional and Technical Services fell 7% year-on-year in the same period versus that of 2023 to $3,641 million and that linked to the collection of Freight and insurance fell 34% year-on-year in the first eight months of 2024 versus a year ago.
Thus, total revenue from Services grew 2% year-on-year in the first eight months of the year. While on the expenditure side, the main drop occurred in Business, professional and technical services with 62% year-on-year in the accumulated 2024 versus 2023 at $697 million. Expenses linked to Travel, tickets and other card payments also fell by 15% year-on-year in the accumulated amount of the year to $2,189 million and that of Freight and insurance by 5% to $5,042 million. In this way, total expenditures registered a decrease of 18% year-on-year in the accumulated amount of the first eight months of 2024.
Some caveats
As the BCRA warns, annual comparisons should be taken with a distance since the statistics are affected by the effect of the prerogative that exporters have to channel up to 20% of external sales of services through the stock market within the framework of the “Export Increase Program” (FOOT). It happens that this portion of the income does not appear in the statistics of the exchange market and the exchange balance because they are not recorded in the Information Regime of Exchange Operations (RIOC), with the exception of those collections that enter and are deposited in local accounts in foreign currency for subsequent settlement in the securities market, which are registered as exchange operations, with no net effect on the exchange market, clarifies the BCRA.
Furthermore, in relation to income, it cannot be ignored that since November 2022, income from funds with non-resident cards due to charges for tourist services and passenger transportation are excluded from the settlement requirement in the exchange market. “This allows recipients to apply a higher exchange rate to card consumption in the country by non-resident tourists”says the BCRA.
Payment of interest and other expenses
On the other hand, last August operations as primary income represented a net outflow of US$1,243 million, explained by net interest payments of US$1,233 million and net expenses of profits, dividends and other income to the abroad for US$10 million. Regarding gross interest payments, The Government and the BCRA made payments for US$1,145 million, of which US$785 million corresponded to the IMF (US$586 million SDR), US$265 million to other Government payments and US$95 million to interest payments to other international organizations (excluding the IMF), while the private sector made gross transfers of US$107 million. While secondary income operations represented a net income of US$13 million.
Source: Ambito
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