The debt contracted by the government would reach 90,000 million dollars. This current debt runs in parallel with at least 35% of the country’s Gross Domestic Product.
The economic policy the Argentine government implemented engages with the deepening of public indebtedness. Between November 2019 and December 2021, some 50,000 million dollars had entered to circulate, according to data revealed by the economist Ramiro Castiñeira.
The director of the Econometric consultancy highlighted via Twitter data on the growth of Argentina’s public debt, following the announcement by the government of Alberto Fernández that it had reached a new agreement with the International Monetary Fund, at the end of January,
Castiñeira pointed out that, for those 50,000 million in debt, it would be necessary to include another 40,000 million between this year and the next, which would make the sum of at least 90,000 million dollars aimed at Fernández’s management.
In a subsequent message, the economist expressed that the current economic situation has the price of government bonds at 30%. According to him, it mainly happens because the market already discounts the default of all public debt. He also forecasts that this situation will escalate to even worse levels in the upcoming renegotiations, which would take place in 2024-2025.
According to the economic journalist Julián Yosovitch, data from Facimex Valores reflects the impact of the debt compared to the country’s Gross Domestic Product also called GDP. The Treasury and the Central Bank of the Argentine Republic together gathered up at least 35% of the Gross Domestic Product.
The sum of the debt of both instances, Yosovitch clarified, is about 10 points higher than at the end of 2019. In just two years, the debt policy in Argentina increased, as in other nations in that period beaten by the pandemic.
The big question at this rate of indebtedness is: how does a debt like this get paid? The popular answer is that this debt would get paid due to the interest covering the possibility of renegotiation from 2024.
The responsibility for payment would crumble down only on the next government, assuming Fernandez doesn’t repeat his ruling, and given his time reaches an end in 2023.
More Taxes (Even for Cryptocurrencies Like Bitcoin)
The Argentine government also seems to be looking for growth in tax collection channels. The agreement with the IMF covers the intention to lessen the fiscal deficit, with goals set for this and the next two years.
This element is one of the characteristics for which the authorities of the South American nation count on bitcoin (BTC) and keep it on the radar. There are two taxes that citizens must pay, both linked to their handling of BTC and other relevant cryptocurrencies.
The mining industry has also caught the interest of the government. Firstly, by giving the use of energy for this activity various decreases in the electrical service and by considering the increase of the rates that miners in the south of the nation must pay for their electricity consumption.
Meanwhile, the official macroeconomic bet points to indebtedness, and inflation constantly reaches new high peaks. On the other hand, there are even those representatives who believe in the possibility that the index would approach 100% inflation.
By: Jenson Nuñez
