Last November, the tourism sector and card expenses also played in favor of income from professional services, and thus, the Services sector deficit experienced a decrease of 22% year-on-year and 29% monthly below US$600 million, being the lowest since last June.
According to the data from the Exchange Balance of the Central Bank (BCRA), the Services account recorded a deficit of US$530 million in November due to the net expenses for Trips, tickets and other card payments for US$491 million, of Other Services for US$189 million and Freight and Insurance for US$148 million, a negative flow that was partially offset by net income from Professional and Technical Business Services for US$299 million. This way, In the accumulated amount of the year, the exchange deficit in Services amounts to US$4,349 million, which represents a 30% drop compared to the same period in 2023.
MEP dollar and tourism expenses
As for the tourism expenseswhich the BCRA estimates are canceled by around 50% with MEP dollar US$132 million fell compared to October, the highest of the year. “It should be noted that around 50% of expenses for trips, tickets and other card payments are directly paid by clients with their own funds in foreign currency, which reduces the deficit impact of these consumptions in the exchange market and in international reserves remember the BCRA.
In the same way as with exports of goods, also in the case of external sales of services, exporters can enter up to 20% of the collections into the country through the stock market within the framework of the aforementioned Export Increase Program (PIE).
Therefore, since this portion of the income does not appear in the published statistics of the exchange market and exchange balance because no registration was made in the RIOC (except for those collections that are received and deposited in local accounts in foreign currency for subsequent settlement in the securities market that are later recorded as exchange operations), the BCRA warns about interannual comparisons of the data.
It is worth remembering that these income occurred within the framework of what was established by the BCRA in November 2022, which allows you to exclude from the settlement requirement in the foreign exchange market the income of funds with non-resident cards for charges for tourist services and passenger transportationwhich gives recipients the option of applying a higher exchange rate to card consumption in the country by non-resident tourists. This was done to encourage foreign exchange earnings from inbound tourism. It is also worth remembering that the BCRA established the possibility of making deferred payments for services before the established deadlines, with exchanges or supported by local financing.
Services: what balance does the accumulated balance leave for the first eleven months of 2024?
On the income side, operations related to Professional and technical business services increased 2% year-on-year to $5,135 million, while those of Travel, tickets and other card payments increased by 50% to $2,477 million and Freight and insurance fell by 19% to $247 million. Thus, the total gross income from services totaled US$7,859 million, which implies a year-on-year growth of 12%.
While on the side of gross expenditures, Professional and technical business services spent US$3,392 million, which is 9% year-on-year more than in 2023, for Travel, tickets and other card payments, expenses totaled US$7,599 million, which represents a drop of 5 %, and those linked to the payment of freight and insurance fell 41% to $1,217 million. In this way the total gross income totals US$7,859 million, This is 12% year-on-year more than in the same period last year, while gross expenses total US$12,208 million, experiencing a drop of 7% compared to the accumulated figure in 2023.
The improvement in the accumulated services account is, mainly, the result of the drop in gross expenses from freight and insurance and increase in gross income from travel, tickets and other card payments.
The rest of the concepts that enter into the result show that the operations for primary income represented a net outflow of US$1,116 million in November, explained by net interest payments for US$1,108 million and net expenditures of profits, dividends and other income abroad for US$8 million.
The BCRA also reports that the Government and the Central Bank carried out gross interest payments for US$1,012 million, amount that was composed of US$741 million transferred to the International Monetary Fund (IMF), some 556 million SDRs, and US$271 million transferred to international organizations (excluding the IMF) and for other concepts. On the other hand, gross cancellations from the private sector amounted to US$123 million. Finally, secondary income operations represented a net income of US$21 million.
Source: Ambito
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