September 24th, 2021
1. Economic measures: raising the minimum wage and profit floor
After the unfavorable electoral result of the ruling party in the legislative primary elections, the government announced a 52.7% increase in the minimum wage after a meeting of the Wage Council. The new plan states that the minimum wage will grow from AR $31,104 this month to $31,938 in October (a 9% increase) and then to AR $32,616 in February 2022 (an additional 3% increase). The Minister of Labor, Claudio Moroni, declared at the end of the meeting of the Wage Council that, “We are complying with the President’s order that the minimum wage should grow faster than inflation. The Official Gazette published decree 620/2021 to update the income tax floor from AR$ 150,000 to AR$ 175,000. After a cabinet change and facing general legislative elections, the government is seeking to implement measures targeting the middle class that also improve the salaries and incomes of informal workers.
La Nación: Aumento del salario mínimo por encima de la inflación, la primera medida de una semana cargada de anuncios económicos
Ámbito: El Gobierno eleva el piso del impuesto a las Ganancias a $175.000
2. National government paid USD $1.885 billon to the IMF
Sources in the Central Bank of the Argentine Republic (BCRA) confirmed payment made to the International Monetary Fund (IMF) for the first loan requested by the administration of Mauricio Macri in 2018. The IMF distributed USD $1.9 billion dollars as part of its Special Drawing Rights (SDRs) to different member countries at the end of August, when Argentina received USD $4.334 billion. The payment decreased the BCRA’s reserves to USD $43.178 billion, which fell by USD $3 billion in August. President Alberto Fernandez said Tuesday before the United Nations Assembly that, during Macri’s administration, a “debticide” was imposed on the country. “Argentina was subjected to toxic and irresponsible IMF debt, an unsustainable debt of USD $57 billion in a year, the equivalent of what the IMF allocated during the pandemic to 85 different countries.” If the government does not close a new financing program with the multilateral organization, it would have to pay almost USD $400 million in interest in November and another USD $1.9 billion on December 22.
3. Changes in the national and Buenos Aires cabinets
After the government’s adverse outcome in the legislative primary elections, President Alberto Fernández made changes to his cabinet. The turnover was aimed at guaranteeing the internal balance of Frente de Todos in response to tensions generated by the ruling coalition’s electoral defeat in the country’s largest districts, especially in the Province of Buenos Aires. Among those who joined the cabinet are: Juan Manzur (former governor of Tucumán), who led the ruling party to an important victory in his province, was appointed Cabinet Chief; Aníbal Fernández (ex-chief of staff from 2011 to 2015) is the new Minister of Security; Julián Domínguez (ex-president of the Chamber of Deputies) was appointed Minister of Agriculture; and Daniel Filmus (former Minister of Education) took over as Minister of Science and Technology. Earlier this week, Buenos Aires Governor Axel Kicillof also announced a cabinet change to provide “renewal.” He incorporated officials with territorial clout, such as the former mayor of Lomas de Zamora, Martin Insaurralde, who was sworn in as the new chief of staff. The cabinet change seeks to improve the ruling party’s management before the general legislative elections, which will be held in November.
4. The trade superplus reached USD $2.339 billion in August its highest figure in 21 months
The National Institute of Statistics and Censuses (Indec) reported that, in the first eight months of 2021, Argentina’s trade value rose to USD $10.649 billion, creating a positive trade balance of USD $2.339 billion. “In the eighth month of the year, exports reached USD $8.093 billion, which represented an improvement of 63.3% year-on-year, while imports registered an increase of 64%, adding USD $5,754 billion,” determined the report. In seasonally adjusted terms, exports in August grew 11.6%, and the trend-cycle registered an increase of 2.7%, compared to July 2021. All items increased sales abroad: fuels and energy (CyE), 182.4%; primary products (PP), 69.2%; manufactures of industrial origin (MOI), 60.4%; and manufactures of agricultural origin (MOA), 46.8 per cent.
5. National government relaxes health restrictions
Health Minister Carla Vizzotti and and Chief of Staff Juan Manzur announced on Tuesday the easing of health restrictions beginning on November 1. These measures include lifting the mandatory use of face masks in open areas and abolishing restriction on the number of peope in social gatherings. Masks will continue to be mandatory in shops, public transport, closed indoor public spaces, and workplaces. In-person economic, industrial, commercial, service, religious, cultural, sports, recreational, and social events in closed spaces will continue requiring masks, social distancing, and ventilation measures. As of September 24, Argentines, residents, and foreigners entering the country will no longer have to quarantine. Meanwhile, as of October 1, foreigners entering Argentina from neighboring countries will no longer have to isolate. Land borders will also be opened at the request of governors, with safe corridors approved by the health authority with a quota defined by the capacity of each region. Meanwhile, foreigners entering the country must present a complete vaccination schedule including the date of last shot at least 14 days prior to arrival in the country, a negative PCR test within 72 hours prior to travel, or an antigen test at the point of entry.