Argentina's 2019 federal budget is credit negative for provinces
On 17 September, Argentina's (B2 stable) Treasury Ministry published its 2019 federal budget proposal, which includes austerity measures to support fiscal consolidation efforts amid domestic financial volatility, wavering investor confidence and a currency crisis. To mitigate the vulnerability to external shocks, the sovereign reviewed its fiscal targets to reach fiscal equilibrium faster than announced earlier this year, with the government now aiming to reach a primary result as percentage of GDP of negative 2.7% in 2018, versus a previous target of negative 3.2%; 0% in 2019, versus a previous target of negative 2.2%; and 1% in 2020, versus a previous target of negative 1.2%. To attain these goals, among other measures, the federal government will reduce discretionary transfers to provinces and transfer the responsibility of subsidies for public transportation and electricity for low-income consumers to the provinces, a credit negative for regional and local governments (RLGs).
On 17 September, Argentina's (B2 stable) Treasury Ministry published its 2019 federal budget proposal, which includes austerity measures to support fiscal consolidation efforts amid domestic financial volatility, wavering investor confidence and a currency crisis. To mitigate the vulnerability to external shocks, the sovereign reviewed its fiscal targets to reach fiscal equilibrium faster than announced earlier this year, with the government now aiming to reach a primary result as percentage of GDP of negative 2.7% in 2018, versus a previous target of negative 3.2%; 0% in 2019, versus a previous target of negative 2.2%; and 1% in 2020, versus a previous target of negative 1.2%. To attain these goals, among other measures, the federal government will reduce discretionary transfers to provinces and transfer the responsibility of subsidies for public transportation and electricity for low-income consumers to the provinces, a credit negative for regional and local governments (RLGs).