investor presentation oct 30 2018 upload - argentina · 2018. 10. 30. · 18 improvements in...
TRANSCRIPT
Investor Presenta,on October 29, 2018
2
1. Financial program
2. Fiscal policy
3. Macroeconomic outlook
Financial Program 2018
3
USD bn Oct-‐Dec 2018 Oct-‐Dec 2018
Needs (excl. Letes) 14.9 Sources (ex. Letes) 22.9
Primary deficit 5.7 Ini<al cash balance 5.3
Plan Gas 0.0
Interests (private, IFIs, financial public sector) 4.6 IMF 13.4
Principal payments (private) 4.1 Private financing 1.9
Interna<onal bonds 0.0 Interna<onal market 0.0
Domes<c bonds 0.4 Domes<c market 0.0
Other 0.4
Repo 3.7 Repo 1.9
Principal payments IFIs 0.5 Financing IFIs (excl. IMF) 2.3
IDB + World Bank + CAF 0.4 IDB + World Bank + CAF 2.2
Other 0.1 Other 0.1
Paris Club 0.0 Paris Club 0.0
Letes (private 8.2 Letes (private) 5.6
Letes in USD 5.2 Letes in USD 2.6
Letes in ARS 3.0 Letes in ARS 3.0
Note: the difference between Sources and Needs (excl. Letes) is used to pay non-‐refinanced Letes maturi<es and there is a remaining balance of USD 5.4 bn. Assump<ons: FX rate ARS / USD 38
Financial Program 2019
4
USD bn 2019 2019
Needs (excl. Letes) 27.9 Sources (excl. Letes) 34.5 Primary deficit 0.0 Ini<al cash balance 5.4 Plan Gas 0.6 Interests (private, IFIs, financial public sector) 14.1 IMF 22.8 Principal payments (private) 9.5 Private financing 1.7
Interna<onal bonds 2.8 Interna<onal markets 0.0 Global ’19 2.8
Domes<c bonds 3.9 Domes<c market 0.0 Bonar ´24 1.2
ARGDUO ´19 1.5
ARGCER ´19 0.8 ARGBON ´19 Badlar+250 0.2 Other 0.2
Repo 2.9 Repo 1.7 IFIs Principal payments 3.6 Financiamiento IFIs (ex-‐FMI) 4.6
IDB + World Bank + CAF 1.7 IDB + World Bank + CAF 4.4
Other 0.2 Other 0.2
Paris Club 1.7 Paris Club 0.0
Letes (private)* 14.5 Letes (private) 8.7 Letes in USD 7.6 Letes in USD 4.6 Letes in ARS 6.9 Letes in ARS 4.1
* It includes exis<ng maturi<es of Letes in 2019 and refinances made in 2018 (in the case of Letes in ARS, also interest) Assump<ons: FX rate ARS / USD 40.1
Financial Program 2019 by currency
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USD bn In ARS In USD Total En ARS En USD Total Needs (excl. Letes) 6.6 21.2 27.9 Sources (excl. Letes) 0.0 34.4 34.5 Primary deficit 0.0 0.0 0.0 Ini<al cash balance 0.0 5.4 5.4 Plan Gas 0.6 0.6
Interest (private, IFIs, financial public sector) 3.3 10.8 14.1 IMF 22.8 22.8
Principal payments (private) 2.7 6.9 9.5 Private financing 0.0 1.7 1.7 Interna<onal bonds 0.0 2.8 2.8 Interna<onal markets 0.0 0.0 0.0
Global ’19 2.8 2.8
Domes<c bonds 2.7 1.2 3.9 Domes<c market 0.0 0.0 0.0 Bonar ´24 1.2 1.2
ARGDUO ´19 1.5 1.5 ARGCER ´19 0.8 0.8 ARGBON ´19 Badlar+250 0.2 0.2 Other 0.2 0.2
Repo 2.9 2.9 Repo 1.7 1.7 IFIs principal payments 0.0 3.6 3.6 IFIs financing (excl. IMF) 0.0 4.6 4.6
IDB + World Bank + CAF 1.7 1.7 IDB + World Bank + CAF 4.4 4.4
Other 0.2 0.2 Other 0.2 0.2
Paris Club 1.7 1.7 Paris Club
Letes (private) 6.9 7.6 14.5 Letes (private) 4.1 4.6 8.7 Letes in USD 7.6 7.6 Letes in USD 4.6 4.6 Letes in ARS 6.9 6.9 Letes in ARS 4.1 4.1
Assump<ons: FX rate ARS/USD 40.1
Evolu,on of the USD Letes Program
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$7.9 $6.8 $6.4 $5.8 $5.3 $4.4 $3.7 $2.4 $2.6 $2.1
$9.2 $8.6 $8.8 $9.3 $9.5
$9.4 $9.3
$9.4 $8.6 $8.6
$17.1
$15.4 $15.2 $15.1 $14.8 $13.8
$13.0 $11.8 $11.2 $10.7
Jan-‐18 Feb-‐18 Mar-‐18 Apr-‐18 May-‐18 Jun-‐18 Jul-‐18 Aug-‐18 Sep-‐18 Oct-‐18
Domes<c investors Foreign investors
Letes stock in USD held by private investors (USD bn)
The stock of Letes held by private investors fell by USD6.4 bn in 2018 YTD. The stock of Letes held by domes,c investors remained stable. Foreign investors held almost half of
the Letes stock in Jan-‐18, while they held 20% of the Letes stock by Oct-‐18.
Conver,ng USD debt to pesos
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$17.1
$15.4 $15.2 $15.1 $14.8 $13.8
$13.0 $11.8
$11.2 $10.7
ARS37 ARS37 ARS59
ARS81 ARS85
ARS81 ARS81 ARS115
ARS202
ARS283
Jan-‐18 Feb-‐18 Mar-‐18 Apr-‐18 May-‐18 Jun-‐18 Jul-‐18 Aug-‐18 Sep-‐18 Oct-‐18
Letes USD
Letes ARS
Letes and Lecaps stock held by private investors (USD bn)
8
1. Financial program
2. Fiscal policy
3. Macroeconomic outlook
9
Accelerated convergence to fiscal balance
Cumula,ve reduc,on of the primary deficit of 4.9% of GDP between 2018 and 2020
Primary fiscal deficit and targets (% of GDP)
-‐4.2%
-‐3.2%
-‐2.2%
-‐1.2%
-‐3.9%
-‐2.7%
0.0%
1.0%
2017 2018 2019 2020
10
Fiscal Targets
0.6%
1.1%
1.9%
2.7%
0.3%
0.9% 1.3%
1Q18 2Q18 3Q18 4Q18
Target Observed
0.3%
0.2%
0.6%
OUTPERFORMING FISCAL TARGETS
Quarterly accumulated primary deficit and targets (% of GDP)
Fiscal target for 3Q19 was overachieved by 0.6 p.p.
11
Primary deficit (na,onal public sector, % of GDP)
Elimina,ng the fiscal deficit in 2019
2.7% 0.2%
0.7%
0.7%
1.5%
0.0%
2018 Deficit Social benefits Subsidies Capex + transfers + other prim. expenditure
Revenue measures 2019 Deficit
Primary expenditures reduc,on
12
Primary expenditures will have declined by 3.2% of GDP by the end of 2018 Public spending is being reduced by 6.2% in 2018 and 8.0% in 2019 in real terms
Consolidated public expenditure (% of GDP)
23 24
24 23 23 24 26 25 26
22 23 24 25 26
29 30 35 34 35
37 38 39
42 42 40 39 37 36 35 34 33
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018 (p
) 2019 (p
) 2020 (p
) 2021 (p
) 2022 (p
) 2023 (p
)
Primary expenditure of the provinces and local governments Primary expenditure of the central government
13
1. Financial program
2. Fiscal policy
3. Macroeconomic outlook
Export-‐led growth for 2019
GDP composi,on (yoy)
14
Growth dynamics in 2019 need to overcome the -‐3,7% sta,s,cal carryover
-‐0.5%
-‐1.6% -‐3.4%
-‐9.7%
20.9%
2.8%
GDP Private consump<on
Public consump<on
Investment Exports Imports
Impact of the drought
15 Source: Secretaría de Gobierno de Agroindustria and Ministry of Treasury projec<ons
The toughest drought in more than 50 year reduced soybean and corn produc,on by 27% in 2018
-‐
5
10
15
20
25
30
35
2014 2015 2016 2017 2018 2019 Forecast as of Sep18 Forecast as of Dec17
-‐27%
Soybean and corn produc,on (in million tons)
16
Exports performance
Exports (12 month, USD millions)
55,000
60,000
65,000
70,000
75,000
80,000
85,000
Dec-‐10
Apr-‐11
Aug-‐11
Dec-‐11
Apr-‐12
Aug-‐12
Dec-‐12
Apr-‐13
Aug-‐13
Dec-‐13
Apr-‐14
Aug-‐14
Dec-‐14
Apr-‐15
Aug-‐15
Dec-‐15
Apr-‐16
Aug-‐16
Dec-‐16
Apr-‐17
Aug-‐17
Dec-‐17
Apr-‐18
Aug-‐18
Reducing the current account deficit
Current account deficit (% of GDP)
17 Source: INDEC and Ministry of Treasury projec<ons
External financial needs dropped due to the reduc,on in the current account deficit
-‐4.6%
-‐2.0%
-‐6%
-‐4%
-‐2%
0%
2%
4%
6%
8%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (p)
2019 (p)
Goods
Services
Other
Current account
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Improvements in productivity and competitiveness
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
ü Simplified incorpora<on of new companies (1 day)
ü Single Window for Interna<onal Trade (“VUCE”)
ü Simplified Exports (up to 300 kg or USD600k a year)
ü Digitalize / reduce requirements to export services and food
ü Elimina<on or simplifica<on of several registers
ü Fully digitalized car transfers
ü Digital background check
ü Simplified procedures for small tax payers (3M individuals)
ü Digital ID
ü Digital state records (birth, marriage, death cer<ficates)
ü Customs insurance (three days)
Regulatory changes improving business development condi,ons
Annual freight transporta,on on Belgrano Cargas – Northern line (‘000 tons)
YTD 2018 volume is higher than full year volume in the last 20 years
Protec,ng the most vulnerable…
Primary expenditure in social assistance programs (% of the GDP)
19
In 2018, the expenditure in pensions and universal child allowance and other family related allowance programs reached the historical maximum
5.7% 5.7% 4.9% 4.8% 4.7%
4.3% 4.5%
5.6% 5.6%
6.7% 6.4% 6.8%
7.8% 8.1% 7.9%
9.0% 9.0% 9.7% 10.0%
10.1%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
20
Provincial expenditure (% of total public expenditure)
The share of provincial expenditures (over total public expenditure) has been rising since 2016, strengthening federalism (and rever,ng to prior).
40%
45%
50%
55%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018*
2019*
…and strengthening federalism
21