The government has chained a battery of economic measures.
The government woke up and went out at 10 with a whole battery of economic news trying to calm the market. As expected, Martín Guzmán linked a series of measures that came out almost simultaneously: Budget 2022, rate segmentation, rate hike by the Central Bank and Now12, among the main ones. The economic team combs a few more details.
Thursday is the day when Alberto Fernández’s spokesperson Gabriela Cerruti will hold her classic weekly conference. Sometimes, she scrolls through some announcements. Today, they seem to have arranged the dominoes perfectly for a cascading effect. And so the pieces fell simultaneously, one after the other. Cerruti was the first to intervene, and a few minutes later the texts of the deferred 2022 budget and the tariff segmentation were reported in the Official Gazette.
Uninterruptedly, news was made of the expected rate hike by the Central Bank and the continuity of Now 12, but with a higher cost of fixed-rate financing.
One by one, all measures
- Budget 2022
The deferred text of the 2022 budget has finally come to light, which according to what was agreed with the IMF was scheduled for 15 April. Two months later, at exactly 10, DNU 331/2022 was published in the Official Journal.
Last December the 2022 Budget Bill was published in the Official Gazette, which the National Executive transmitted to the National Congress on 15 September 2021, Decree no. 882/2021 and the Administrative Resolution 4/2022, which extended the Budget Law 2021 n. 27,591.
To the surprise of many, the text does not whiten a new pattern of annual inflation. The estimate that was agreed with the IMF months ago was 48%, for now something closer to 60% was expected.
- Segmentation of energy subsidies
“The increase in international energy prices requires the strengthening of the allocation of the budget towards those functions with the greatest distribution impact and the expansion of production capacity in the medium and long term”, he warned in a statement.
Decree 332/2022 establishes the subsidy segmentation regime to users and residential users of public electricity and natural gas services through the networks which establishes the new guidelines for the allocation of energy contributions and the conditions for their implementation.
To carry out the segmentation of subsidies, the payment capacity of households will be assessed on the basis of their socio-economic conditions, in order to improve the distributional impact of the allocation.
This was announced by the government, through its spokeswoman Gabriela Cerruti that those who earn more than $ 333,000 will pay full rates He specified that this segment is made up of households that have an income equivalent “to more than 3 and a half incomes of the basic basket established by INDEC or 3 properties”.
- BCRA rate increase
After the inflation data in May and amid investor pressure and tensions on the local market, the Central Bank anticipated the board meeting on Thursday, which always takes place in the afternoon, and announced a new rate hike at the beginning of the session.
“The Board of Directors of the Central Bank of the Argentine Republic (BCRA) decided today to increase by 300 basis points the annual nominal interest rate of the letters of liquidity (Leliq) at 28 days, rising from 49% to 52%, “the monetary authority said in a statement.
The correction is higher than that of the latest revisions, but lower than market expectations. The BCRA had the delicate task of looking for something to decompress the market.
In this way, retail time deposits, up to $ 10 million now have a minimum rate of 53% per year. For the rest of the fixed-term deposits in the private sector, the guaranteed minimum annual rate is set at 50%. This keeps the real rate negative with respect to the inflation projected by the market, but it is close, since the effective annual rate, which is what you get if the deposits are rolled over for twelve months, is equal to 68%.
- now 12
In line with the new Central Bank policy, the government has extended the Now 12 program, but as expected, the cost of financing the purchase of products such as appliances, computers, bicycles and clothing will be higher. With a resolution of the Ministry of Commerce, it was learned that the Annual Nominal Rate (TNA) for payments in 3, 6 and 12 fixed installments will be 42%, while for 18 and 24 fixed installments it will represent 49%.
Basically, the conditions of the Now 12 program are maintained. It will run 7 days a week and all products and services can be purchased online and at participating stores across the country. Among the most important items are household appliances, appliances, computers, notebooks and tablets, mattresses, furniture, construction materials and tools, bicycles, clothing and footwear.
YN
Source: Clarin
