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The treacherous budget and the “July imposition”

The treacherous budget and the “July imposition”
The treacherous budget and the “July imposition”

The advance of the 2025 Budget sought to calm the markets. The main points. The May Pact became the “July Imposition”.

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During this week, in order to try to calm down the financial movements and the run that was being chaotic for the national government, the Minister of Economy sent to the National Congress a draft budget 2025 with some data corresponding to the way 2024 will end to take into account and that we can analyze today.

These data are as follows:

  • Inflation Annual 2024: 139% from start to finish in the year. The reality is that with 5 months it marked an accumulated 72% and with the June one we would be accumulating close to 75/76% in the first semester. Therefore, in the second semester, knowing that we have a higher level of inflation in the months of July-August-November and December, it could be no less than 155-160%. At the current rate and without new devaluations – because 2 would be necessary due to the times in which inflation consumes them – if this occurs, it could escalate to levels close to 300% annually.
  • Exchange rate (US dollar) establish a final value on December 31 of $1,016 per dollar, maintaining only the 2% monthly crawling pegBut if the devaluations mentioned above were applied, this value would be higher than $3,000 at the end of the year.
  • Gross Domestic Product: they estimated a fall of -0.5%. Although already having as certain data the fall of -5.8% of the GDP established by the INDEC last March and above all how the falls in national collection from April to June are correlated – seasonally adjusting the payment of profits of companies in May – with the falls in sales of organizations such as CAME and the INDEC indicators of industry and construction for April and May, in which they are in the order of 15 to 20% and 32 to 37% respectively, allows us to establish that the annual fall of the GDP will not be less than -4.5 or -5%.

What we must reflect is that they communicate that they do not believe it is necessary for now to request the extension of the COUNTRY TAX which has its expiration date on December 19, for which this drop in national revenue represents about $ 7 BM, for which the level of deficit corresponding to energy and transportation will be fully solved by raising the rates that all the neighbors / citizens of the country pay, making them almost prohibitive and, above all, if the levels of inflation with the possible devaluations foreseen occur, it would lead to poverty close to 90%, as expressed by Mr. President in his inauguration speech on December 10, 2023 on the steps of Congress with his back to the national Parliament.

With reference to the July impositionsince to call it May Pact It should be in the month named in its name and to be a Pact it would have been possible to discuss the points. As for the most economic points, that is 6 and 7 we can say. That taking as a basis the elimination of the co-participation established in the electoral campaign by the current President and the Deputy for Bs As Espert, as the natural resources of the provinces put on stage with the RIGI of the Bases Law are arranged by the Nation; so that the “July imposition“If this is feasible, a constitutional reform should be carried out and they do not have the necessary national legislators (173 deputies and 47 senators), otherwise it is a scam for Argentines throughout the country, including their governors.

Economic and tax analyst

Source: Ambito

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