The Tariffs and Subsidies Observatory of the Interdisciplinary Institute of Political Economy (IIEP), dependent on the UBA and of Conicet, revealed that in the first five months of the year, the Subsidies to public services fell by 34%.
Although they pointed out that subsidies to the main services (water, energy and transportation) had an annual growth of 157% in May, their real variation shows a 34% reduction accumulated annually in the period.
Likewise, he revealed that the granting of subsidies by the National State, so far this year, “accumulated an execution of the 70% regarding credit in force for the main selected items”.
Currently, “rate coverage, estimated as the weighted average of the costs of public services in the AMBA at the expense of the user, it is the 40% in the month of June“, that is “The State is responsible for the remaining 60%.”
Subsidies: what was the variation for each sector
- Energy: increase of 165% nominal annual cumulativewhile they reduce 33% real annual accumulated in the first five months of the year.
- Transport: nominal annual accumulated increase of 138%, which is equivalent to a cumulative 37% reduction annually in real terms.
- Argentinian airlines: the transfers were void so far this year.
- AYSA: accrued alone $75 million against $9,723 from the same previous period.
- ENARSA: nominal annual cumulative increase of 64% (-57% real annual cumulative).
- CAMMESA: increase of 290% annual accumulated nominal values while reduce 4% accumulated annually in real terms.
- Gas.Ar Plan: 66% accumulated annual drop (-90% in real terms).
The impact of the fall in subsidies
Given this scenario, the IIEP pointed out that “in the first five months of 2024 the nominal subsidies total $3.1 billion while in constant currency of May They total $3.3 trillion and are reduced 34% compared to the same previous period“.
Likewise, they detailed that “this variation is mainly explained by lower actual transfers to ENARSA that explains 22 percentage pointsrespectively, of the 34 total reductions”.
In this sense, they indicated that “in the case of ENARSA, The observed reduction may reflect the fact that during the year 2023 shipments of Liquefied Natural Gas were acquired in advance in the first months of the year and at a price 80% top at the market prices observed during 2024″ and anticipated that “this could imply that this item begin to have more important accruals starting in June“.
At the same time, they pointed out that “the reduction of subsidies to CAMMESA is explained by the increase in the price of energy for N1 households and General Distribution Demand (industries and small businesses and others) that began to cover the full cost of the service in February.
In this regard, they highlighted that “this situation was interrupted as of May 1, at which time seasonal price increases were suspended“although “in June a path of increases was resumed with the particularity that no segment of the distribution demand covers the full cost of the service”.
On the other hand, they reported that “in May 2024 currency the real subsidies accumulate $11.2 billion in the last twelve months“, which “implies a real drop of 23% compared to the same previous period (accumulated between June 2022 and May 2023) and 42% compared to the peak observed in June 2022“.
Source: Ambito
