June 14th, 2024


1. The senate approved the Bases Law and the Tax Package

After a 13-hour debate, the Senate approved the Law of Bases promoted by the Executive Power with 36 votes in favor, 36 votes against and the positive vote of the President of the body, Victoria Villarruel. The text, which received several modifications, will return for a second review to the Chamber of Deputies, which will have to approve the text or insist on its version. On the other hand, with 37 votes in favor and 35 against, the ruling party managed to approve the majority opinion for the Fiscal Law. But the victory was incomplete, as two entire chapters – those that modified the personal property tax and income tax scheme – were completely rejected, and there were also articles that were lost from the tax whitewashing. Once corrected and renumbered, the text approved by the Senate will be sent back to the Chamber of Deputies, which will have to decide whether to accept or reject the changes introduced in the Senate. In some chapters, the Senate modified by two thirds, so the Deputies will need to reach the same majority if they decide to insist.

La Nación: En una votación electrizante, Victoria Villarruel debió desempatar y el oficialismo logró aprobar la Ley Bases

2. Inflation and basic food basket data released

With public services, fuel and prepaid services tariffs contained, the inflation index for May was 4.2%. Thus, the consumer price index totals 71.9% so far this year and 276.4% in the last twelve months. However, the most significant fact was that core inflation – that which does not include regulated or seasonal prices – advanced 3.7%, the lowest figure since January 2022. On the other hand, INDEC reported this Thursday that in the same month a family of four needed A$851,351 to not be poor. This is an increase of 2.8% over the previous month. Meanwhile, the basic food basket increased by 3.7% and a family of four needed A$386,978 not to be indigent.    

La Nación: La inflación de mayo fue de 4,2% y alcanzó el mejor registro en más de dos años

Clarín: Canasta básica: una familia necesitó $ 851.351 en mayo para no ser pobre

3. National Government renewed the swap with China 

The Central Bank (BCRA) announced that together with the Central Bank of the People’s Republic of China (PBOC) it renewed the totality of the activated tranche of the RMB 35 billion (equivalent to US$5 billion) swap between both institutions for a 12-month term. In addition, from that moment on, the BCRA will gradually reduce the activated amount of the swap during the following 12 months. “In this way, and coinciding with the maturity date of the current currency swap agreement, the aforementioned tranche will be completely deactivated by mid-2026.” “The extension until July 2026 of the activated tranche of the currency swap will allow the BCRA to continue reducing the risks it faces during the current economic transition, initiated in December 2023, towards a consistent and sustainable monetary and exchange rate regime.”

Clarín: El Gobierno logró renovar por un año el swap con China por US$ 5.000 millones

4. Javier Milei gave a speech at the EFI Expo

President Javier Milei was present at the Expo EFI (Economy, Finance and Investment) last Wednesday. There, he gave a speech, while in parallel the debate on the Law of Bases was taking place in Congress. The President expressed his dissatisfaction with the six months of debate in Congress on the law, pointing out that the adjustment would have been less painful if it had been approved earlier. He criticized politicians “for being more interested in business than in people,” and the legacy of Alberto Fernandez. In addition, the President defended Minister Sandra Pettovello, implicated in a scandal, and pointed out the increase of the country risk index as a consequence of the policy. He referred in a derogatory manner to the governor of Buenos Aires, Axel Kicillof, and affirmed that he will not negotiate the “zero deficit.” He concluded by stating that lifting the exchange rate cap will require cleaning up the Central Bank’s balance sheet.

Dólar Hoy: Milei en la Expo EFI: “A la política no le importa la gente, solo sus negocios”

5. Javier Milei will be present at the G7 Summit

Javier Milei traveled to meet with the leaders of the Group of Seven (G7), who are meeting this Thursday in Italy, where technological, environmental and war issues will be discussed. The President was accompanied by the Chairman of the Committee of Economic Advisors, Demian Reidel, the Argentine Ambassador to the United States, Gerardo Werthein, and Fernando Iglesias, Chairman of the Foreign Affairs and Worship Committee of the Chamber of Deputies. Among those present will be U.S. President Joe Biben, Germany’s Olaf Scholz, Canada’s Justin Trudeau, France’s Emmanuel Macron, Japan’s Fumio Kishida, and Britain’s Premier Rishi Sunak. In turn, Italy opened its doors this year to Pope Francis, the King of Jordan, the President of Brazil, Luiz Inácio Lula da Silva, the Ukrainian President, Volodimir Zelensky, the re-elected Prime Minister of India, Narendra Modi, as well as the leaders of Turkey, Saudi Arabia, the United Arab Emirates, Kenya, Algeria and Mauritania, which holds the presidency of the African Union.  

La Nación: Qué es la cumbre del G7, por qué este año va a Milei y cuáles son los principales temas en debate