According to the audit, the financial cost of bills issued with respect to total public revenue also had an upward trend: 2.16% in 2015, 3.16% in 2016, 7.57% in 2017 and 7, 71% in 2018. In the same line, the interest paid with respect to the financial result varied from 3.85% in 2016, to 7.92% in 2017 and closed at 8.93% during 2018.
The document explains that This situation generated an increase in short-term financing. At the same rate, the interest rates paid grew, both in pesos and in dollars. The weighted cost rose from 9.47% in pesos in 2016 to 27.63% in 2018. In dollars, the increase was from 3.25% to 4.63% in the same period. Interest payments reached 8% of GDP in 2018, this, added to capital maturities, according to the AGN “brought a growing deterioration of liquidity.”
Another of the ingredients in the cocktail that made the debt unsustainable was the greater predominance of private creditors over the public sector. The composition went from 18% in private hands in 2016, to 53% in 2018. As a consequence of the exposed vulnerabilities, that same year the reputational risk measured by the Country Risk increased, which shot up 58% only during that period. After that debacle, the financing was cut off and the emergency bailout from the IMF arrived.
“The management was not efficient, it transformed short-term debt into structural debt”, defines the document to which this medium had access. With this scenario, as a result of a greater validation of financial costs in the issuances, the market and renewal risk also increased, since the stock of debt, both in pesos and in dollars, also grew.
The college of auditors met this week in the Eva Perón Room of the AGN headquarters. Its head, Jesús Rodríguez, and the general auditors Francisco Javier Fernández, María Graciela de la Rosa, Juan Ignacio Forlón, Gabriel Mihura Estrada, Miguel Ángel Pichetto and Alejandro M. Nieva participated.
Source: Ambito
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