The economic policy currently applied by the Argentine government appeals for the deepening of public indebtedness. So much so that, between November 2019 and December 2021, some 50,000 million dollars have been added, according to data published by the economist Ramiro Castiñeira.
The director of the Econometric consultancy published via Twitter data on the growth of the Argentine public debt, as a result of 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, as we reported in CriptoNoticias.
Castiñeira pointed out that to those 50,000 million of debt it would be necessary to add another 40,000 million between this year and the next, which would give the sum of some 90,000 million dollars for Fernández’s management.
In a following message, the economist alerted that the current economic situation has the price of government bonds at 30%. Mainly, he says, because “the market already discounts the default of all public debt. His forecast is that this will worsen significantly in the next debt renegotiation, for 2024-2025. “This agreement [con el FMI] it does not solve anything, it only covers the deficit with debt”, he pointed out.
For his part, the economic journalist Julián Yosovitch shared data of Facimex Securities that reflect the impact of debt compared to the country’s Gross Domestic Product (GDP). Between the debt of the Treasury and the Central Bank of the Argentine Republic, it adds up to around 35% of GDP.
The sum of the debt of both instances, Yosovitch emphasized, is about 10 points higher than at the end of 2019. That is, in just two years the debt policy in Argentina has been accentuated, as in other nations in that period. marked by the pandemic.
The big question at this rate of indebtedness is: how will it be paid? The short answer is that, with our sights set on a renegotiation from 2024, responsibility for payment would fall only on the next government. Assuming Fernandez doesn’t repeat, given his term ends in 2023.
Long answer: more taxes (even for bitcoin)
While deepening its public indebtedness, the Argentine government also seems to be seeking to increase its tax collection channels. In fact, the agreement with the IMF contemplates precisely the approach of reduce the fiscal deficit, with goals set for this and the next two years. Which is the same: the debt will ultimately fall on the people.
This is one of the elements for which the authorities of the South American country have bitcoin (BTC) on the radar: there are two taxes that citizens must pay, associated with their handling of BTC and other cryptocurrencies.
The mining industry has also caught the attention of the government. First, attributing to the use of energy for this activity various drops in the electrical service, then considerably increasing the rates that miners in the south of the country pay for their use of electricity.
Meanwhile, the official macroeconomic bet points to indebtedness and inflation is constantly rising. There are even those, like deputy José Luis Espert, who fear the possibility that the index will reach 100% inflation.