May 19, 2013
There seems something distinctly suspicious about AFIP tax bureau chief Ricardo Echegaray’s timing in sneaking in the April revenue figures on Thursday evening amid all the thunderous applause for the massive Lower House approval of the YPF expropriation — almost as if he had something to hide. And indeed the 24.4 percent revenue increase announced was the lowest in 26 months — barely apace with independent estimates of inflation and definitely behind public spending (we have yet to see the April figures here but March spending was 38.6 percent up on the same month last year). To make matters worse, this season’s soy prices of well over 500 dollars a ton turned export duties into the big star of last month’s revenue figures with over seven billion pesos (since the entire export duty haul for 2011 was 9.3 billion dollars, this means that more money came in last month than in two months of last year) — these export levies were all one-way traffic since no export reimbursements were recorded last month. This outstanding haul makes virtually all the other figures in a mediocre tax collection distinctly worse (thus income tax rose a mere 11.5 percent, barely ahead of the official exchange rate, never mind other estimates) — Domestic Trade Secretary Guillermo Moreno’s trade barriers are a two-edged sword here because import duties fell by over 20 percent.
Even allowing for Easter and a glut of public holidays last month, the fiscal picture is thus more than slightly disturbing — even with a soy boom, the government stands to have spent three pesos last month for every two earned without even the excuse of an election year. The Cristina Fernández de Kirchner administration took the precaution of freeing its access to Central Bank reserves earlier this year and is in the process of lining up YPF as a further cash cow but with this kind of imbalance between revenue and expenditure, even such massive emergency funding could last months rather than years. A heavy burden thus falls on the new YPF chief Miguel Galuccio to reduce the heavy drainage of fuel imports on the public purse at a time when international oil prices could prove even more volatile than soy.
The CFK administration would thus be extremely unwise if it allowed YPF euphoria to distract its attention from the Treasury accounts which were the daily obsession of the late Néstor Kirchner.