All-time high: public debt rose again in August to $ 345,851 million

The combination of a sustained expansion of public spending above the rate of inflationary growth of fiscal resources and the lag of the monthly rate of devaluation of the peso in relation to inflation, determined in August a further increase in the debt of the ‘central administration.

The finance ministry predicted that in the month leading up to STEP 2021, public debt stood at a record $ 345,851 million, marking the sixth consecutive monthly increase and the fifteenth in 21 months of the Frente de Todos government. .

Public administration debt showed the sixth consecutive monthly increase in August and the fifteenth in 21 months of the Frente de Todos government

In the first case, it increased by 728 million USD in gross terms, and by 892 million USD, net of operations of the Central Administration with the Central Bank; and in the second (since the start of Alberto Fernández’s presidency) it has increased by $ 32,552 million and $ 26,114 million, gross and net of the BCRA, respectively.

According to the survey that the Congressional Budget Office usually does, “In August, public market securities for $ 302,964 million (equivalent to $ 3,143 million) were canceled, including the amortization of Boncer TX21 for $ 160,096 million.. Three calls for tenders took place which resulted in the placement of various instruments for a total cash value (EV) of $ 314,793 million, of which government securities in national currency -Lecer, Ledes and Lepase- were subscribed in cash for VE $ 270,714 million and bonds denominated in dollars payable in pesos (USD linked) for VE $ 44,079. placed by tender in August was 230 days ”.

And the OPC adds that “in the last tender of the month, a second round corresponding to the market maker program was introduced, in which aspiring market makers signed Ledes due in November and December for 2,277 million. of VE dollars “.

While the government paid interest in August equivalent to $ 590 million, of which 66% in foreign currency, including the payment of interest on the IMF stand-by loan for the equivalent of 348 million dollars.

Mitigate the contribution of the Central Bank

In clear terms, these movements revealed that Central Administration had to increase net debt by the equivalent of $ 272 million due to the recurring excess of expenditure over total resources, despite the fact that it had the valuable contribution of the BCRA’s accounting profit transfers in three installments; one in 2 for $ 40,000 million that he used to honor a maturity with the Temporary Advances monetary entity (one year term) for the same amount; 5 others for 120,000 million dollars, and the other 11 for 40,000 million dollars again.

The Central Bank helped mitigate the increase in debt with the transfer of profits to the Treasury for $ 200,000 million, despite the fact that own reserves were only revalued by $ 12,000 million, and that Leliq and the Passes have racked up around $ 120,000 million.

Such Amount of Central Bank “Profits” Surprise Much of Economists, given that if the foreign assets of the monetary entity, less than $ 12,000 million, barely they generate in pesos the effect of the devaluation rate, approximately 12,000 million dollars per month, the payment of interest for the placement of Liquidity Bills in Banks (Leliq) amounts over this period to approximately 66,000 million dollars; and Pass operations another $ 53,000 million.

The next months

It is estimated that September maturities total the equivalent of $ 8,335 million, (amortization for USD 7,953 million and interest for USD 382 million). Excluding intra-public sector holdings, maturities are reduced to $ 4,854 million, of which 54% is paid in local currency. The timing of the first installment of repayment of the IMF standby loan amounting to approximately US $ 1,890 million is remarkable.

And given the persistent expansion of budgetary expenditure by an amount greater than the execution of resources, in the first third of the month, before the STEP, the BCRA handed over to the General Treasury of the Nation two other tranches of 60 000 and 80 000 million pesos, which will mitigate the sustained increase in total debt, even if it has no effect in the case of commitments other than intra-public commitments.

Between September and December 2021, maturities are estimated at the equivalent of $ 24,164 million, which is reduced to $ 15,962 million if intra-public sector maturities are excluded..

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