For economists, the tax savings due to segmentation are “irrelevant”

The delay in the implementation of the new tariff regime will not be free for the Government. According to economists, for having pushed the removal of subsidies and segmentation until the last quarter of 2022 instead of starting it at the beginning of the year, the savings that will be achieved will be “insignificant” for public accounts. And they warn that pesos that won’t be spent on this side could go to other items.

Lorena Giorgio, chief economist of the consulting firm Equilibra, explains that the four million families who will stop receiving – initially gradually – energy subsidies, together with the small share of electricity and gas consumption of subsidized families who would not benefit from October for exceeding the monthly consumption limit, “it would allow subsidies to be reduced by 0.2 percentage points this year of gross domestic product (GDP) compared to the scenario in which segmentation and a monthly ceiling on subsidized consumption were not implemented in 2022 ”.

As Giorgio points out, the improvement in public spending would mainly focus on items related to electricity, since the high season of gas consumption is moving away together with the low winter temperatures. “If we simulate that at the beginning of the year the segmentation of almost 30% of households and the ceiling on residential consumption had been applied, the savings would have tripled (-0.6% percentage points of GDP compared to the subsidies estimated for 2022 without any type of segmentation or ceiling). In summary, tax savings from subsidies will be low this year, but would be significant in 2023“.

For Sebastian Menescaldi, director of EcoGo, «segmentation It is the beginning of a necessary and fair process, which allows for greater efficiency in public spending. This is the greatest achievement of him: the beginning (after having placed a minister) ».

However, Menescaldi understands that “in fiscal terms, its effect in reducing the short-term deficit will seem insignificant and will not be noticed “.

According to the economist, “saving is only equivalent to 0.06% of GDP forecast for the year and is not sufficient to correct the brake that the fiscal result shows today (a deficit of 3.5% of the product). But at least it is a beginning, it has cost to break the inertia “.

The calculation of Pablo Repetto, director of Aurum, is that the announced segmentation “it has little effect in 2022 and a limited effect in 2023 which could be 0.5% of GDP, depending on international energy prices, which are much worse than a few months ago “.

Repetto warns that the tax savings that will be achieved with these rate changes could be even lower than expected. “There is an effect that could dilute it even more because if distributors continue to accumulate debts with CAMMESA – the wholesale market administrator – the level of subsidies will not go down “. The reason is that “what is adjusted is the cost of production but not distribution, so that distributors keep the tariff increases and do not pay for the energy”.

Furthermore, Repetto points out that what the treasury would save on one side would end up being spent on the other. “In short, the total tax saving, that of 0.5% of GDP in 2023, is almost the entire increase in the tax cost that the Treasury will have to pay for the increase it has had to make in interest rates in order to continue issuing debt. in pesos “.

From the consultancy firm FMyA, Fernando Marull points out that following the announcements to the Ministry of Economy, “It is not clear what happens with the shops. Today I will not tell you if they will increase the rate or not. ”

Regarding the impact of the subsidy cuts, the economist noted in televised statements that Sergio Massa “He has already made promises on three fronts: fiscal, monetary and foreign exchange. I think the markets will give 45 days to see what Massa’s plan is like, that’s why there is a certain calm in the exchange and it makes sense for the financial dollar to go down. “This Tuesday closed the countryside with liquidity. $ 278 and the blue dollar a $ 291.

Moving forward, the key point is what will happen to the dollar and reserves. “There are no announcements yet, Perhaps the mass plan foresees a division of the exchange rate, which would be an intermediate way to lubricate the market that has slowed down today “, Marull slipped. And he anticipated that”if the Massa plan fails, devaluation is inevitable“.

AQ