The public debt and the heavy legacy: what is the next government waiting for?

After three years of deep external debt, we have a gross debt of $ 345 billion, the most indebted country in the region in the report of the Economic Commission for Latin America and the Caribbean. (ECLAC). According to the Ministry of Finance, nearly 90% of PBI in the last quarter of 2018. If we compare with the same period of 2017, the increase was 30%, in just one year.

It must be said that the gross debt is the total amount of the debt, without taking into account the badets or other aspects of the financial debt. If we move to net debt (discounting the value of gold, debt instruments, loans, insurance, pensions and other receivables), the numbers are improving, but the situation remains problematic.

Net debt for the same period is $ 277 billion. This represents an increase of 18.5% over 2017 and 66% over the same period in 2016.when it was $ 167 billion. As the National University of Avellaneda has pointed out, the current external debt would fund 1,313 million minimum wages or 4,625 million universal missions per child.

But given this number, The most worrying thing is that 75% is in foreign currency Because? Because then The change in the exchange rate affects our financial situation very directly. Fluctuations in the dollar increase our debt and make it more difficult to pay.

If the dollar reached the ceiling of the reference area ($ 51.45), the external debt-to-GDP ratio would increase by 10 percentage points and the result would be a gross debt equivalent to 100% of GDP. I mean, in 2019 we could start saying "They got us into a GDP."

Beyond the phrases where the alarms sound, such a high ratio could accelerate the mistrust of our economy. and with current country risk levels (around 900 points), getting external funding is almost impossible.

This must be crossed with data from the Abdala German Foundation, which shows that By 2020, the amount to be paid, between interest and due dates, will exceed $ 20,000 million. By the year 2021, $ 33,951 million will have to be paid. That does not stop there, the situation becomes more worrying for 2022, where the number reaches 51,953 million dollars.

Restructuring seems to be a necessary conditiondespite the words of the current Minister of Finance, who has stated publicly: "If Argentina wishes to have an additional disbursement program, it could have a new program. But if with the private sector it suffices to deal with the payment of the debt, a new program with the Fund will not be necessary once the one we have completed."

L & # 39; s hope? Something like the second half but planned for 2020. The government's plan has not changed dramatically since 2015, it expects to achieve a balanced budget (which is doubtful because of the fall in income due to the economic crisis itself) the rest of the variables of the economy are ordered. A mantra that repeats the oficialismo "the worst and the not" has this implied. The question of how it improves and expands is more than worthwhile, but there is no official answer to that.

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