The size of the bond amount that the Government will take to the street in May has surprised economists. Private calculations are in accordance with Government calculations, which are estimated at $ 230 billion the cost of the “income booster” package that will reach at least 13 million people. Translated into wholesale dollars, which now trades at $ 113, representing an amount of US $ 2,000 million.

Economist Fernando Marull, director of consulting firm FMyA, calculates that if it is confirmed that the aid also goes to the universe of informal workers (nearly 8 million personally), “the total value of the ads is US $ 2,000 million .an amount equal to 0.34% of the total product“.

Although Minister Martín Guzmán said that in order to offset this additional cost, a tax would be promoted on “unexpected income” that would cover companies with profit of more than $ 1,000 millionthis tribute must go through Congress, so it is unclear whether it will be approved or when these funds will enter in the event that the ruling party gathers the necessary votes in both chambers.

For this reason, Marull pointed out that “this bond was funded by inflation. The funding for these announcements was largely collected by the government because it had higher inflation in the first quarter. They got more money and now they are spending it“.

In the first quarter, inflation was 16.1%. In the Budget prepared by Guzmán for 2022 and rejected by Congress last year, an inflation of 33%is expected. And in the agreement with the IMF a range of 38 to 48% was established. It is clear that this calculation will be small, because consultants see the inflation floor for this year at 60%. The higher the price increase, the higher the collection for the treasury through inflation tax.

For Marull, this increase in bond spending puts Monetary Fund objectives at risk, but he pointed out that it was less harmful in the second quarter, because at that time the promises are not very demanding. “The hardest goal was for the fourth quarter.”

Guido Lorenzo, director of consulting firm LCG, added that there will be these announcements an effect equal to 0.4% in GDPalso including the recent 50% increase in the value of the Food Card.

“This is an important number for how difficult the fiscal path agreed with the Fund is. We need to see what the effects are now on Guzmán’s trip to Washington,” Lorenzo said, referring to the minister’s participation in the meeting. Spring of the IMF and the World Bank.

“6.7% inflation in March marked the inability of a government to fail in its policies. Real wages and pensions have fallen by nearly 30% in the last four years. And now he proposes to expand bad policies with more taxes and more plans“, said Agustín Etchebarne, director general of Libertad y Progreso.

“The result is bad, there are no structural reforms, and there are internal battles that are causing more political instability. The risk is that inflation will rise to some point if Argentines accelerate the flight of money“, he hinted.

“I don’t think the new tax will pass Congress. Obviously if progress is made on this, the problem of companies seeing how the cake is shrinking and shrinking is exacerbated, ”Etchebarne said.

AQ