The government of Javier Milei managed to postpone the first negative data regarding the National Public Sector for a month, given that The financial deficit that was to appear in June occurred in July. The reasons are linked to the payment of coupons on hard dollar bonds that matured last month.
Economy Minister Luis Caputo said this to the clearing and settlement agents (ALYCs) who met with him this week. He told them that It would be a specific case, as he was able to confirm Ambit with market sources. That is to say that They hope that this will not happen again in the coming months.
The maintenance of what is known as “fiscal anchor” It is critical to the government’s plan, as it is the main sign of its commitment to budgetary health and, therefore, will not need to issue to cover state deficits.
But, although Caputo points out that the problem that occurred last month was the payment of bonds in dollars, so he had to use pesos to buy them from the Central Bank, There are elements that allow us to anticipate that there will be new pressures on spending until the end of the year.
Payments stepped on
According to data from the Congressional Budget Office (CBO), during June the The government postponed payments for $1.4 billion, thereby accumulating a stock of outstanding debts for $2.68 billion.
He Floating Debt Monitor prepared by the technical office of the Legislative Branch indicates that, in In May, the Government accrued debt for $939,193 million, which was added to $263.886 million from previous years.
In June, month in which the Minister of Economy, Luis Caputo, reported a fiscal surplus of $238 billion, postponed payments for another $2.43 billion and left another $249.126 billion unpaid from previous years. So he was left with a stock of $2.68 trillion.
According to the OPC, the level of floating debt that the state has as of June 2024 It is the highest since 2013 in nominal historical terms.
The OPC monitor reveals that the government postponed transfers worth $1.77 billion last month and personnel expenses worth $700.218 billion. Next, there are payments made for $64 billion in capital goods and $65 billion in consumer goods.
The debt incurred has had a positive impact on the cash basis accounts so far, because in In the accounting of the National Public Sector used by the Government, the important thing is to measure how many pesos come in and how many go out month by month. But now Caputo has to start cancelling.
Within the IMF rules
One point to note is that the Government will not face questions from the IMF while the total of floating debt does not exceed 10% of current expenses. With current numbers it would not reach 6%.
But it is true that, If the Government had not postponed these payments, the fiscal result for June would have been in deficit..
Seen another way, The government now has a debt of $2 trillion from the central administration, $271 billion from social security agencies and $366 billion from decentralized agencies.
However, as reported Scope, Caputo would have room to increase public spending without endangering the “fiscal anchor”.
He Argentine Institute of Fiscal Analysis (IARAF) understands that in the second half Spending adjustment could drop to 20% (from 30% in the first half of the year) and the result would be balanced, assuming GDP falls by 3.5% and debt payments remain the same as in 2023. If they decided to maintain a surplus of 0.4% of GDP, the cut would have to be 26% between July and December.
Source: Ambito
