Measures to meet fiscal balance

In an effort to regain market confidence the Government of Argentina adopted a series of measures with the purpose of reassuring the market that Argentina will be able to meet its debt obligations. The main targets are: a) to eliminate the fiscal deficit by next year, b) to increase revenues and c) to reduce Government expenses. We summarize herein the main measures announced by the Government:

Economic and financial measures

  • Capital expenditure of fix assets or disbursements will be reduced 0.7% of the GDP, which in real terms with the devaluation of the Argentine Peso, will represent  a real saving of 50% of the GDP. It applies among other items, to infrastructure projects.
  • Reduction in subsidies of 0.5% of the GDP, due to the transfer to the city of Buenos Aires and the Province of Buenos Aires the costs of the Electric Social Tariff and the subsidies of the Automobile Transport of the metropolitan system.
  • Reduction in remunerations and operative expenses of 0.2% of the GDP.
  • Reduction in current expenses of 0.2% of the GDP.
  • Suspension of one (1) year on the reduction of the employers' contribution to the social security system, the so called No Taxable Minimum for such contributions.
  • The Government will maintain the collection of 0.2% of the GDP which was scheduled to be reduced in 2019, and therefore obtain an additional collection of AR$40,000M in 2019.
  • Additional collection from the export duties in 1% of the GDP.
  • Withholding taxes on primary exports and services: soy and sub products was reduced from 25.5% to 18%, but with a general contribution of AR$4 per US Dollar exported.
  • Same situation for other exports with a general contribution of AR$3 per US Dollar of exports generated.
  • Other crops such as wheat and corn will be also taxed at an average rate of 11%.
  • Reduction in the withholding from 24% to 18% on the exports of beans, flours and soy oil.
  • Mining products will be taxed in 10% of the exported amount.

These impact of these measures represent:

a) an increase of the duty rights of AR$ 68,000M (0.5% GDP) in 2018 and AR$ 280,000M in 2019 (1.5% GDP).

b) elimination of the primary fiscal deficit in 2019 (balance on the public accounts) and surplus of 1% of the GDP since 2020.

c) Saving of USD 6,000M in 2019 and of USD 5,200M in 2020.

Institutional measures

  • Freezing of the hiring of personnel in the public sector
  • Salary increases exclusively in accordance to inflation
  • Reduction of the number of ministries of the federal executive power in thirteen (13)
  • Possible formal petition to the IMF of additional disbursement to secure the financial plan in 2019.


  • To balance this reductions in expenditures, the Government will increase certain social expenditures in 0.3% of the GDP, through a formula of mobility and the increase of 2% in quantities. In addition, the rest of the social expenditures will increase at the same level of the inflation to avoid a reduction of the financial capacity of those more vulnerable to the inflation.
  • The federal government will grant an economic "support" to those citizens who are entitled to receive the so called Asignación Universal por Hijo (AUH) on September and December.
  • The social security system (Anses) will grant new credits with a subsidized interest rate for pensions and retired citizens.
  • The government will renegotiate with the pharmaceutical sector a new prices agreement for senior citizens entitled to the benefits of the PAMI (National Institute of Social Service for Retirees and Pensioners).

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