Due to the increase in debt and the fall in economic activity, the “sustainability indicators” of indebtedness deteriorated
Due to the increase in debt and the fall in economic activity, exports and Central Bank reserves, in 2020 the “sustainability indicators” of indebtedness deteriorated. And the National Government already owes 103.7% of GDP, the production value of one year, exceeding 89.5% at the end of 2019 and more than doubling the 48.6% at the end of 2015.
Despite the exchange agreed with the creditors, during 2020 in pesos and in foreign currency, the national public debt grew by US $ 12,517 million. It went from US $ 323,065 million registered at the end of December 2019 to US $ 335,582 million in December 2020, according to data from the Ministry of Finance released by the newspaper Clarín.
If debt pending restructuring and GDP coupon are included, the increase is US $ 13,069 million: from US $ 336,027 it rose to US $ 349,096 million, 104.5% of GDP.
This level of public indebtedness does not include the debts of the provinces or those of the Central Bank.
In relation to the gross reserves of the BCRA, the debt in foreign currency rose from 556.1% to 645.1%. And regarding exports, it increased from 314.1% to 395.9%.
Meanwhile, due to the restructuring of part of the debt, there was a relief in the payment of interest: they fell from 4.3% of GDP in 2019 to 2.4% in 2020. And of the total tax resources, it fell from 18.2 to 9.8%.
Interest payments to multilateral organizations totaled US $ 1.994 million
However, “during 2020, interest payments reached an amount equivalent to US $ 8,043 million, of which 46% were made in foreign currency. Bond and bill payments represented 71% of the total, 26% of which were in foreign currency. foreign currency The debt restructuring processes carried out during the year allowed a reduction in the weight of interest in foreign currency. Regarding interest payments to multilateral organizations, they totaled US $ 1.994 billion, of which 65% (US $ 1.306 billion) corresponded to the IMF’s Stand By loan, “says a report from the Budget Office of the Congress (OPC).
Of the total debt “in normal payment situation”, 76.3% (US $ 248,995 million) is contracted in foreign currency. At the end of 2019 it was 77.7% (US $ 253,996 million) and in 2015 it was 66.9%. On the other hand, 54.3% of the public debt is governed by Argentine legislation and 45.7% by foreign legislation.
Due to the partial restructuring of the debt, there was relief in the payment of interest: they fell from 4.3% of GDP in 2019 to 2.4% in 2020
Part of the higher public debt is due to the fact that during 2020 the indebtedness with financial organizations, such as the IDB and the World Bank, rose by US $ 3,267 million, of which US $ 1,836 million were with the IMF: from u $ 44,128 million to $ 45,965 million. This is because the debt with the Fund is contracted by an asset of the agency (Special Drawing Rights – SDR) that is calculated daily against a basket of currencies including the dollar, the euro, the Chinese renminbi, the Japanese yen and the British pound. At the end of 2019 a SDR was worth US $ 1.38 and at the end of 2020 it rose to US $ 1.44, added the aforementioned morning.
The rest of the increase in debt was financed with the issuance of public titles and with “temporary advances” from the Central Bank.
For its part, the debt swap, which managed to re-profile the maturities and lower interest rates but higher than the international average, it generated a rise in debt capital of about US $ 1 billion.
It is that “the bondholders who entered the exchange in the late accession period were recognized running interest on their eligible bonds until April 6, through the delivery of bonds in the same currency of the chosen securities. Considering both instances – early and late-, the issuance of bonds for recognition of running interest offset the nominal deduction applicable for some securities, with which the operation resulted in a net increase of around US $ 1,000 million in the total stock of outstanding securities ” , also according to the OPC.