These resources come from counting as current income the entire difference between the amount raised by debt issues in pesos and the nominal value of the debt issued, as Francisco Ballester, director of MindY-Economics, explained at the end of last year in a twitter thread.
“Suppose that a year ago an inflation-linked bond was issued. Today, just because of accumulated inflation, that bond would be worth 50% more (based on December inflation). If it were reissued today, for every $100 “nominal” $150 “effective” would enter the state. Those $50 are being counted as current income”, detailed the economist.
In fact, in March, the $103,235 million that the Treasury recorded as “Net Property Income” almost equaled the difference of $104,422 million between the real value awarded and the nominal value of all securities issued during the third month of the year.
1816 explained that this effect has been growing due to the increasing weight of inflation-indexed bonds (CER), which are usually placed at prices above $100 face value. “It has become usual for the Ministry of Economy to reopen titles issued a long time ago (such as CER 2023 and 2024 bonds), which therefore have a high technical value (because they accrued a lot of inflation),” he deepened.
Those $103,000 million explained more than 20% of the current income that the Treasury had, leaving almost the remaining 80% for tax income, which tends to be by far the main source of resources. In 2021, property income had only represented less than 3%.
In the first quarter, income from property rentals amounted to $229 billion, of which $122 billion corresponded to the Treasury due to the previously mentioned accounting.
In other words, without those $122,000 million, the fiscal deficit for the first three months of 2022 would have been $314,735 million, above what was agreed with the multilateral credit organization.
“The accounting is not technically incorrect. But given the magnitude of the number, the Government should be more transparent when reporting it. Just as BCRA profits were removed from the fiscal result at the time, this should also be removed in my opinion” Ballester expressed at the time.
Source: Ambito
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