According to the report to which he accessed Scope, As of December 31, 2018, the maturity profile of the Central Administration for 2019 was US$86,448 million, which represented 192.75% of the international reserve stock.
“The Audit reports determined that, in 2018, during the Presidency of Mauricio Macri, laws and other current regulations were not complied with, mainly on the chapter on public debt,” Forlón remarked in a post on the social network Twitter.
As this medium was able to learn, the reports conclude that, in the context analyzed (characterized by the existence of a primary and current account deficit, the closure of the voluntary credit markets and the free entry and exit of capital) a high-risk situation arose. of non-compliance with public debt service payments and economic vulnerability, compromising the sustainability of public debt.
In addition, they indicate that in 2018 Central Administration debt reached 85.6% of GDP, increasing sharply compared to the previous year when it reached 56.8% of GDP and? The country’s total external debt during that year of Cambiemos’ management reached US$277,827 million, 71.9% of GDP.
Credit default with the IMF
The AGN documents also indicate that in 2018 Argentina requested a Stand By Agreement with the IMF for a total amount of US$56.5 billion for a period of 36 months, of which in 2018 were carried out three disbursements equivalent to 28,031 million dollars representing 36% of the issuances for the year and 17% of the total public debt.
“In relation to the credit subscribed with the IMF (International Monetary Fund) for an amount of 56,500 million dollars, Resolution 108/09 and article 61 of Law 24,156 were not complied with, norms that provide that prior to the issuance, the feasibility of the operation and the repayment capacity are analyzed,” the auditor explained. “The lack of prior analysis led to the issuance of an unsustainable public debt, compromising the resources and expenses, as well as the financial result of the Investment Account,” added Forlón.
Given this, the auditor general explained that the National Constitution, Law 24,156 and other regulations provide that in matters of sovereign indebtedness he intervenes previously; or the National Congress approving the indebtedness through the enactment of a law; or the President of the Nation by signing a decree”. However, “in the case of the credit signed with the IMF, none of the parties formally intervened in the Agreement”Forlon concluded.
The Public Debt Supervision Commission of the National Audit Office (AGN) pointed out this Tuesday that the agreement with the IMF of 2018, during the administration of former President Mauricio Macri, incurred in a “breach of standard procedures”, among other things. issues.
“The stand-by loan from the International Monetary Fund does not meet the established criteria of the negotiation and execution process (current regulations),” said the AGN on the debt that the previous government administration assumed with the multilateral organization, in the audit report combined with respect to the 2018 investment account.
The failed debt strategy
The analysis of the 2018 fiscal year revealed that the bills issued in local currency by the Central Bank reached 19,443 million dollars (in 2017 it had been 61,805 million dollars), while the net indebtedness of the Central Administration rose 55,940, 62 million dollars, deepening the following risks:
- currency risk: in 2018, more than 84.1% of public debt was denominated in foreign currency.
- interest rate risk: In 2018, 31.5% of the debt stock at the end of the year had a variable rate.
- Liquidity and renewal risk: As of 12/31/18, 29.2% of public debt matured between 2019 and 2020 and 53.6% between 2021 and 2025.
- The average life of public debt of the National State he was just 7.3 years old in 2018.
- Debt instrumented through public titles represented 77.1% of the total debt.
The adverse opinion also considered that the Ministry of Finance of the government of Mauricio Macri did not have a formally approved debt strategy.
“When the market closed in 2018 and the national government appealed to the IMF, the lack of a Debt Strategy made an ex ante evaluation of the impacts on the solvency and sustainability of public debt necessary. However, there was no participation, in the process of the Agreement, of the competent areas in the management of Public Credit, which further aggravated the risks for its good management”, he highlighted.