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Argentina is vulnerable to its own policies not to Ukraine

The tragedy in Ukraine will have a global economic impact. In principle, Argentina is not so vulnerable because it exports much more cereals and soybeans than it imports gas. But if it keeps utility tariffs frozen, the increase in gas imports will add another destabilizing factor. (more…)


Double is spent on state – own companies than in the AUH

A critical point in the negotiations with the IMF is the reduction of economic subsidies. To this end, it is crucial to update utility rates and eliminate assistance to state-owned companies. In this context, proposing the creation of a state-own food company is extremely contradictory. (more…)


The Nation should not be in charge of water services in AMBA

Together with electricity distribution and urban transport, water and sanitation is another public service in AMBA that the federal government should stop administering. The service should be transferred to CABA and Buenos Aires province so that they manage the service as in the rest of the country. (more…)


The federal government should not be in charge of AMBA´s utilities

The fiscal deficit is highly sensitive to economic subsidies. For this reason, it is difficult to comply with the path agreed with the IMF without revising them. This requires not only the establishment of a new tariff regime but also an orderly reorganization of how state services are organized.  (more…)


The new agreement with the IMF will also fail

Progress towards a new agreement with the IMF was announced. Once again, a gradualist strategy is chosen, which assumes that the fiscal deficit will be reduced because revenues will increase more than expenditures thanks to economic growth. It is the same inconsistency that led to the failure of the previous agreement. (more…)


In Argentina having fiscal deficits is a “State Policy”

The political “fracture” (la grieta) is blamed for the lack of consensus to establish “State policies” to promote development. However, spending in excess of income is a “State policy” in itself which enjoys broad consensus among the political parties. This is one of the main factors that explain Argentina’s decline. (more…)


Central Bank debt has doubled

The fiscal deficit of the national public sector is in the order of 5% of GDP. Most of it was financed with monetary printing which, since it is not entirely accepted by the public, had to be absorbed with Leliqs and repros. This generates an accelerated and unsustainable increase in the Central Bank’s debt. (more…)


Fiscal gradualism leads to high inflation and stagnation

The government said that an agreement with the IMF has been reached for a gradual reduction in the fiscal deficit, but not on the deadlines. The Argentine problem is the chronic propensity of the State to spend over its resources. This cannot be solved with gradualism but with a structural reform of the State. (more…)


Vat should absorb the sale tax

A new suspension of the provincial tax cuts accorded in the 2017 Fiscal Consensus was signed. The strategy of gradual reduction of distortive taxes and the rethinking of the provincial sale tax has failed. The permanent and definitive change should be the federal VAT absorbing the provincial sale tax.  (more…)


The state spends more on economic subsidies than on salaries

The FMI’s evaluation of the loans granted in 2018 motivated a heated exchange of accusations. But the most important conclusion is that the core of the problem is the persistence of unsustainable fiscal deficits. To correct them, the urgency is not to lower public wages spending but economic subsidies. (more…)