Monthly Economic Report - March 2010 (PDF version) "The State Fiscal and Debt Repayment,
with or without Debt Relief Fund"
By Ramiro Castiñeira
The creation of the "Bicentenary Fund" by decree sparked a political and institutional crisis that has as its backdrop the Central Bank's independence.
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Apart from the details of the conflict, the recent repeal of the controversial decree by the new version fragmented in "Fund of Debt Relief " with the decree that enables payment to qualified organizations, also found the Government of the need to get enough votes in either house as to convert the first one in law.
Apart from the details of the conflict, the recent repeal of the controversial decree by the new version fragmented in "Fund of Debt Relief " with the decree that enables payment to qualified organizations, also found the Government of the need to get enough votes in either house as to convert the first one in law.
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between the two orders provides the use of $ s6.500 million BCRA reserves to meet the debt payments in 2010. The amount represents 13.5% of the current stock of reserves, and is equivalent to 1 , 8% of GDP.
between the two orders provides the use of $ s6.500 million BCRA reserves to meet the debt payments in 2010. The amount represents 13.5% of the current stock of reserves, and is equivalent to 1 , 8% of GDP.
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The amount is not significant when one realizes the total foreign assets held by the BCRA, and a trade surplus that promises to double it in size. Furthermore, in this context, the qualified debt-reduction strategy to avoid refinancing with rates above 13% annually, is sound financially. However, its implementation is understood as an advance on the institutions, in addition to revealing the lack of credit as the primary surplus to meet debt payments.
The amount is not significant when one realizes the total foreign assets held by the BCRA, and a trade surplus that promises to double it in size. Furthermore, in this context, the qualified debt-reduction strategy to avoid refinancing with rates above 13% annually, is sound financially. However, its implementation is understood as an advance on the institutions, in addition to revealing the lack of credit as the primary surplus to meet debt payments.
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Indeed, the global economic recession which Argentina was no exception, with the drought that affected most of the country, shrugged substantial tax revenues to the state in 2009. This was coupled on an expansionary fiscal policy that sought promptly mitigate the impact of the crisis on the level of activity. Lower income and higher spending combined to pass a primary surplus of 2.7% of GDP in 2008, a deficit of 0.4% of GDP in 2009.
Indeed, the global economic recession which Argentina was no exception, with the drought that affected most of the country, shrugged substantial tax revenues to the state in 2009. This was coupled on an expansionary fiscal policy that sought promptly mitigate the impact of the crisis on the level of activity. Lower income and higher spending combined to pass a primary surplus of 2.7% of GDP in 2008, a deficit of 0.4% of GDP in 2009.
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In 2010 the world economic cycle is reversed underpinned by fiscal and monetary stimulus in the U.S., China and Europe. At the local level is compounded by the fiscal stimulus itself, the recovery of harvest levels and a reduced outflow from the economy. The context of economic recovery will help the Government rebuild much of the tax revenue lost in the bottom of the cycle. However, a higher tax does not necessarily entail an increase in the fiscal surplus as the rate at which spending evolves, even the worst of the crisis.
In 2010 the world economic cycle is reversed underpinned by fiscal and monetary stimulus in the U.S., China and Europe. At the local level is compounded by the fiscal stimulus itself, the recovery of harvest levels and a reduced outflow from the economy. The context of economic recovery will help the Government rebuild much of the tax revenue lost in the bottom of the cycle. However, a higher tax does not necessarily entail an increase in the fiscal surplus as the rate at which spending evolves, even the worst of the crisis.
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In sum, this report seeks to make an analysis of fiscal and financial situation of the national government, in order to estimate which are not only financing needs this year, but also the economic impact depending on the different paths that take to address them, with or without the 'Debt Relief Fund. "
In sum, this report seeks to make an analysis of fiscal and financial situation of the national government, in order to estimate which are not only financing needs this year, but also the economic impact depending on the different paths that take to address them, with or without the 'Debt Relief Fund. "
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