Postponing the increase in electricity will generate greater pressure on the fiscal deficit. The Minister of Economy, Sergio Massa, promised to reduce. To achieve this, it must, in part, spend less on energy subsidies. He estimated to start reaching some reduction in September, but he will have to wait – at least- until November.
Massa announced a few weeks ago that he had reached an agreement with the board of directors of the International Monetary Fund (IMF). It is for the next review by the multilateral organization for the loan he has granted to the country. This Friday the board of directors is meeting to approve it.
However, there are changes from the time when Massa celebrated compared to the present. . The “soybean dollar”, which allowed him to accumulate reserves in the Central Bank, has stopped circulating. And the producers were left with a bad taste after they were banned from buying financial dollars with their companies.
And the other novelty is that the the reduction of the fiscal deficit will also be slower than expected. Cammesa, the wholesale administrator of the electricity system, would have consumed $ 9 billion this year. This figure included the first elimination of subsidies to families, corresponding to the two-month period September-October. But that pruning won’t be effective, at least in October.
“It was initially estimated that the high-income segment would not claim (the subsidy rate) and that it would remain as N1 (high-income tier, or non-subsidy level) to be 10% (of total households). The picture today is that 30% -35% of users did not apply for the subsidy, ”explained Royón.
Several governors and mayors have informed the national government their fear of a rate hike. Especially in the low and middle income sectors. The executive power has proposed that the resolution come from the regulators of the provinces, but they have not achieved it. Walter Martello, appointed controller of Enre -the regulator of Edenor and Edesur- I was concerned about this matter and its extent.
We must “find users who, for various reasons, could not register to keep the subsidy,” Martello told regulators in the province of Buenos Aires.
The “millions” of families who were not registered in the subsidies register will lose this benefit on their electricity and gas bills. Massa asked for savings in all, due to the double effect of “greater impact on the pockets of consumers and on public accounts”.
The Government continues to emphasize that the grant register remains open (to maintain grants). And that even those who have not been accepted can try to register again if there have been changes in their economic situation.
Massa has made the reduction of subsidies one of the joists of its 2023 budget. He asked for savings on the consumption of electricity, water and gas, which would allow a reduction in the fiscal deficit in the next year.
The 2023 budget foresees a decline in energy subsidies. The minister did not provide numbers, but percentages: in 2022 they will represent 2.3% of GDP, while in 2023 they will bite 1.6% of that cake. Specialist estimates calculate that this means going from the $ 15,000 million that would be allocated this year for this purpose to a range of $ 11,000 to $ 13,000 million for 2023.
In Kirchnerism they are reluctant to approve the rate correction. But there is a respite in not criticizing Massa. They will accompany you. Public criticism could come from former vice president Amado Boudou (he was convicted of corruption), who does not represent the Patria Institute, but other sectors of Kirchnerism. Privately, there are also Peronist governors who question the application of segmentation.
The head of the economy accused the provinces of a “27% decline in access to the social rate”. This mode allows vulnerable families to access services at highly subsidized rates. “The registry is still open for those who feel they need help,” she explained.
Source: Clarin
