September 4, 2020
1. Government announces 99% participation rate in external debt swap
Economy Minister Martín Guzmán announced that 99% of private creditors accepted the debt restructuring plan presented by the Argentine government. During the public announcement that took place at the presidential palace, the minister was joined by President Alberto Fernández and Vice President Cristina Fernández de Kirchner. Guzmán also stated that for the 2021 budget, the deficit as percentage of GDP would change from 10% to 4.5%. President Fernández used the event to declare that Argentina is now in the recovery phase of its extended economic crisis and that the government will have greater resources at its disposal, since it won’t have to pay back large sums to private creditors. Additionally, Fernández announced that his administration is moving forward on negotiations with the IMF to refinance USD $45 billion in debt. Both the president and Guzmán highlighted the effort made by the government to renegotiate its debt in the midst of the pandemic and appreciated the support received by the vice president and congressional leaders backing the renegotiation.
2. President Fernandez gave an interview where he referred to the current situation of the country
President Alberto Fernández gave an interview to the program “A Dos Voces” in the President’s residence, where he assured that he does not discard the possibility of returning to phase one, due to the increase in COVID-19 infections and assured that in Argentina “there is no longer a quarantine”. On the other hand, with respect to Decree 690 that declares cellular telephony, internet and paid television as a public service, he assured that the treatment of the sector wouldn’t be like other services, but that companies would be enabled to regulate prices requesting authorization to the State. On the other hand, when asked about the judicial reform bill presented in Congress, the President defended the initiative, claiming that it orders the functioning of the Federal Justice in Argentina.
3. Productive reactivation plans announced for the Nation and Province of Buenos Aires
In the framework of National Industry Day, the Minister of Productive Development Matías Kulfas, along with President Alberto Fernández and the leader of the UIA, Argentina’s largest employer federation, announced a packet of industrial development measures for a sum of AR$ 450 billion (USD $6.05 billion). The measures include credit for SMEs; credit for projects that can generate exports, substitute imports or develop innovative production processes; the creation of a development bank system to coordinate loans and credits between the public and private sectors; a program of industrial park development, a digital transformation plan for the SME 4.0 plan; and financial assistance for domestic enterprises that hope to be providers to strategic sectors. Likewise, Buenos Aires provincial Governor Axel Kicillof, presented the plan “Provincia en Marcha” with the goal of stimulating the province’s economy rapidly as soon as the pandemic ends. The plan involves four pillars (productive development and the fostering of demand; infrastructure and public works; credit assistance for productive development; and sustainability and employment generation) and will require an investment of AR$ 1.24 billion (USD $16.7 million).
4. Drop in tax revenues slows in August
The Argentine federal tax administration (AFIP) announced that the government collected AR$ 612.15 billion (USD $8.2 billion). In this way, the year-over-year drop slowed down 8% compared to July. The improvement in August can be explained by the presentation of sworn declarations and the payment of capital gains and personal asset taxes, a tax that was increased through the Social Solidarity and Productive Reactivation Law passed in December 2019. The income generated from capital gains taxes stood at AR$ 141.12 billion (USD $1.9 billion), while personal assets taxes generated AR$ 43.88 billion (USD $589.6 million). On the other hand, the Argentine statistical agency (INDEC) indicated that industry and construction registered in July year-on-year drops of 6.9% and 12.9%, respectively. Anyway, both sectors showed an advance compared to June of the current year (2.9% and 6.8%).
5. Chamber of Deputies renews protocol to meet remotely and approves two bills
Following an extended session, the lower house approved two projects: one to aid tourism and another to establish increases to fines for illegal fishing. The discussion was held after an extensive debate where the renovation of the protocol to hold virtual sessions that had expired was approved via consensus by the majority of parties. The opposition Juntos por el Cambio expressed their opposition to this extension of the protocol and attended to the session. Following a controversy regarding the extension of mixed sessions, the opposition block will request the judicial annulment of the session to consider it invalid.