Now, how to explain the deficit in November: once again it was tourism abroad and expenses related to transport, freight and insurance, the factors that explain the monthly red. According to official data, the “Services” account registered a deficit of US$641 million mainly due to net expenses for Travel, tickets and other card payments for US$470 million, Freight and Insurance for US$396 million and Other Services for US$4 million.
In the run-up to the World Cup in Qatar, once again it is evident that both foreign tourism and external purchases with cards and expenses related to the transport of merchandise, such as freight and insurance, end up being a kind of “Pac- Man” of the BCRA reserves. But the monthly balance was not even worse if it were not for the good performance of external sales of Business, professional and technical Services, which reported net income of US$230 million. From the analysis of the numbers, it appears that gross expenses for travel totaled US$531 million, which implies a drop of 14% compared to the previous month and 31% compared to September.
According to the vision of the BCRA chaired by Miguel Pesce, this retraction is linked to AFIP Resolution 5270 of October 6, which determined that as of October 12, all monthly consumption with foreign providers with cards that exceed US$300 they must pay a surcharge of 25% extra on the official price of the dollar, on account of the Personal Property Tax. It should be noted that this additional percentage is added to two other surcharges already in force: 30% of the PAIS tax and 45% on account of the Income tax. But it is also worth remembering that on October 12, the Government ordered through Decree 682 to establish the PAIS tax for foreign currency purchases for the acquisition of personal, cultural and recreational services abroad (does not include educational teaching).
In parallel, the BCRA resolved to exclude from the foreign exchange market settlement requirement the income of funds with non-resident cards, charges for tourist services contracted by non-residents and charges for non-resident passenger transport services, in order to to encourage the entry of foreign currency from foreign tourists.
On the other hand, operations for primary income represented a net outflow of US$917 million, mainly due to net “Interest” payments of US$905 million. Within gross interest payments, US$707 million were made by the Government and the BCRA, while the private sector totaled US$210 million. With the data for November, the accumulated 2022 of the services account registers a deficit of US$9,633 million, which represents an increase of 157% compared to the same period of 2021, mainly driven by the growth of gross expenses in the concept of Travel, tickets and other card payments and, to a lesser extent, Freight and insurance in a context of higher prices for the international transport of goods, acknowledges the BCRA. When the data for December is known, with the World Cup already in full swing and Argentina in the final, red will undoubtedly climb again, not only for seasonal reasons, bringing the deficit for the entire year to above US$10,000 millions.
Source: Ambito
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