With just enough, Guzmán “saved the month” and obtained the pesos to pay the debt but does not dispel fears

Finally, the economic team of Martín Guzmán managed to obtain the amount sought in the local market (the $ 190,000 million) in its tender on Tuesday, the last of September, but closed another month with a level of “positive net funding” around zero. This means that what he got from local investors was only enough to pay the bills for the month, and not much more. This is a drastic change from funding levels positive of 123% average and peaks of 165%. According to numbers from Empiria , the consulting firm of Hernán Lacunza , September ends with a roll-over of 104%. It is up from 98% last month, but, as said, it is still “weak” in the face of what it was and even more so to the financing that the Treasury needs as it has increased post-PASO fiscal spending.

Positive net financing, forgotten

“The demand for money is not recovering and the issuance will be inexorable to finance electoral spending . Be careful with October and November where more than $ 350 billion with private companies expire “, Juan Ignacio Paolicchi , an economist at Empiria, posted on his Twitter account . The best months for Guzmán and his team were June (roll-over of 165%) and April (127%). As Gabriel Caamaño of the Ledesma consulting firm recalls, in 9 months Guzmán only achieved approximately 40% of what was projected for 2021 . And he highlighted that the dollar link bonds (which this time was not part of the menu) explained the net contribution in September. CER instruments and pesos had a negative net contribution, as in August. In accumulated, only the CER and dollar link bonds have positive results. In the market they believe that the Finance team, from now on, must apply all the artillery to accelerate the flow of new money towards the financing program and in this way minimize the need to resort to monetary financing. Already in September the BCRA issued $ 300,000 million to assist the Treasury. It will be key for the Economy to improve its financing ratio because the increase in spending will need whoever finances it: either it will be Miguel Pesce via temporary advances or profits; or the one who contributes the pesos will be the local investors. The accounts for now do not seem to be doing too well for Guzmán and the market’s fear is that there will be an overflow of issuance .

The deficit has been increasing but with a ceiling

The latest data showed that the primary fiscal deficit for August was $ 130 billion and almost $ 200 billion if interest is added. “The deficit has been increasing month by month due to subsidies (with real rates increasingly backward) and pre-STEP electoral spending. Until August the primary deficit was 1% GDP and the Government’s goal is 4% GDP, so the Government has a 3% GDP margin until the end of the year ($ 1.3 billion) “, says Fernando Marull , director of FMyA. Since the PASO, the Government is very active launching measures, but “for now” there are no costly new measures. In addition, with spending accelerating until December, the Government obtained (with an accounting device with the DEGS) more “machine” for $ 422,000 million (1% GDP). “The primary fiscal deficit will be $ 1.3 trillion, and more interests will be $ 1.5 trillion total; it has to issue for $ 1.4 trillion. We estimate that it will use only 1 trillion and the rest will be financed with debt. The issuance of pesos is putting pressure on the CCL dollar free. We remember, the impact of the issuance of pesos is going to hit fully during the summer, when the demand for pesos falls, “warned Marull. Short blanket, as economists say, the situation for Guzmán and his team in a context where pesos “burn” and dollars are scarce (as always).