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The Government believes that imports will not be a problem this year: the impact of the recession and the end of the PAIS Tax - Infobae
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El Gobierno cree que las importaciones no serán un problema este año: el impacto de la recesión y el fin del Impuesto PAIS
Los datos de agosto mostraron una caída fuerte de las compras al exterior. Los temores de industriales y las expectativas oficiales para el último cuatrimestre
www.infobae.com
September 23, 2024
August data showed a sharp drop in foreign purchases. Industrialists' fears and official expectations for the last four months
By Natalia Donato
Indec reported that the trade balance registered an improvement of almost USD 3 billion in August compared to a year earlier (Photo: EFE)
Despite the fears of some industrialists about a sharp increase in imports due to the reduced restrictions applied by the Government, they can rest assured that this will not happen in 2024, due to two relevant factors.
The economic team is calm about the availability of foreign currency: it knows that beyond the exchange rate lag - the devaluation of the peso remains at 2%, with inflation that doubles that figure - which at another time would be driving purchases abroad, today the conditions are not right for strong import growth. For several reasons, but the slow exit from the recession and the announcement of the upcoming elimination of the PAIS Tax are the fundamental ones.
The August trade balance figures , released last Thursday, showed an improvement in the result of almost USD 3 billion, since a deficit of USD 974 million recorded in August 2023 was converted into a surplus this year of USD 1.963 billion. But the figure was driven by a 14.8% increase in exports (they climbed to USD 6.793 billion) and a contraction of imports of almost 30%. Having reached USD 5.72 billion in July, in August they fell to USD 4.83 billion.
But this information has a very specific explanation: importers already knew, in advance, that the Government would lower the PAIS Tax by 10 points in September. Although at one point there were certain doubts, the Minister of Economy, Luis Caputo , reaffirmed it every time he could. What happened? The operators who had some stock and could wait to import, did so. Since the beginning of September, importing goods from abroad is cheaper .
Foreign purchases remain relatively low
In contrast, better import figures are expected for September, as they will show the operations postponed in August that were carried out once the tax was reduced.
But the Government believes that, beyond this jump that will take place again this month, from October to November they will be at an average of USD 5.5 billion. The slow recovery of activity added to the fact that the 7.5% of the PAIS Tax still has to be removed in December will cause purchases to be contained.
Budget for next year
By 2025, the market and the Government are expecting stronger import pressure, driven by the projected increase in general activity, the increasing easing of customs barriers and the persistence of the exchange rate lag.
“In September we will have the revenge of August, that is, everything that was stopped last month will be due this month and will be paid between October and November. Going forward, what remains of the PAIS Tax is 7.5% and there will surely be a new deferral towards December and January, but thinking about 2025, I think we are going to a scheme in which imports will grow strongly,” said Lorenzo Sigaut Gravina , from the Equilibra consultancy.
The economist gave several reasons:
- the reduction of the PAIS Tax that has already taken place and the elimination planned for December;
- the Government's decision to lower inflation as its first objective, which is why "the exchange rate is used as an anchor and this causes the exchange rate to appreciate more"; and
- There are no restrictions, payment terms are being shortened, and we are also beginning to see some recovery.
“It will rise somewhat in September, but I don’t see a big growth this year. The dynamics of imports depends on the level of activity, but with the restrictions, during the previous government’s administration, importing was part of the indirect dollarization scheme that companies had. We are seeing that this continues, there are no short-term prospects for getting out of the restrictions, but when one looks at the numbers, this does not seem to be happening massively, as it was last year,” said the economist.
Delgado highlighted that while USD 7.4 billion were paid in imports in July 2023, in the same month this year the number was reduced to USD 5.4 billion.
