How did Macri lead a debt-free country to fail in just four years?

Rarely a case like the one just settled by the government of Mauricio Macri with the recent selective default statement. In the space of just over three and a half years, Cambiemos has contracted an extraordinary debt that he then had to renegotiate for not having the solvency necessary to do it on time, as he l & rsquo; Had agreed.

Although the Minister of Finance, Hernán Lacunza, wanted to use "reperfilamiento" as a euphemism, Argentina fell into technical default. This is how we will move to Casa Rosada with the worst fate in economic matters. How did Macri generate a financial disaster so quickly?

From 2015 – beginning of macro-economic management – to this part, the issuance of Treasury debt in local and foreign currency, disbursements for the loan with the IMF signed in June 2018 (and renegotiated in September), and provincial issuance and foreign currency businesses are added to $ 187,706 million, said the Metropolitan University of Education and Labor.

During this period, private debt rose from 12 percent of GDP to 40 percent, foreign currency debt increased from 36.4 percent to 69.0 percent, and liabilities from the external sector increased from 13.9 percent to 43.9 percent. % In total, gross debt has increased from 52.6% to 88.5%.

According to the Ministry of Finance, if taken from a monetary point of view, the gross debt amounts to USD 324,898 millionwhile the contract with the private sector amounts to 144 250 million dollars. 82.4% of the debt was foreign currency investments and 85.8% came from the Consolidated Revenue Fund (approximately $ 161,030 million).

In the same vein, public debt services rose from 8.8% of total spending in 2015 to 21.5% in 2019. The actual expenditures paid in this section increased by 152.4%. %.

A total of $ 49,199 million in 2015 was allocated to this concept and $ 43,607 million in 2019 (first half of each year). In nominal terms, this is an increase of 781% over the last 4 years. An act of total irresponsibility that will face the next direction.

The bulk of the problem of commitments will arise in the years to come. Future governments must take on deadlines for more than $ 180,000 million, with a perspective to 2020 that comes with an almost unpayable debt.

Recover debt in record time

The announcement by the government of the paradigm shift in debt is far from a viable outcome. In Argentina, there is no case where the same direction has taken such a large scale, and then reconfigured the terms of payment in such a short time. It should be recalled that the agreement with the Fund was signed in June 2018.

The maturities in pesos transferred to the next management exceed $ 7,960 million (LECAP) and more than $ 1,700 million (LECER) adjusted for inflation, which presents the same risk in terms of exchange rate pressure.

In the case of dollar maturities, they implied an additional charge of $ 5,700 million in terms of notes and $ 2,612 million in exchange rate bonds. In this context, the goal is to try to stop the unstoppable flight of dollars from Central Bank coffers (BCRA).

Since July 31, the plant has lost US $ 11 121 million until the day before announcements, between the withdrawal of its deposits, the repayment of its debt and the sale of dollars.