The passage of the Milei government’s first budget law as well as the tax innocence law would be celebrated in the market tomorrow Bullish day for Argentine stock and bond priceswhich in turn would support a greater decline in sovereign risk. Additionally, some analysts noted that doubts remain over how debts due in January will be paid off.
Fernando Marull, FMyA member, hopes there will be “positive influence on bonds and stocks”, as the market could not cope with what happened to the budget and fiscal innocence approved on Friday evening.
On the other hand, he predicted that the dollar I would carry on stable On Friday, the retail price remained at $1,475 and the wholesale version remained at $1,452.50.
Fernando Bear, Chief economist at consulting firm Quantum explained that the approval serves both standards “Signal for consolidation of the current price level”apart from the fact that you certainly have a “positive first reaction.” However, he reminded that this would be the case this week little activity due to year-end celebrations both locally and internationally.
In the meantime, Andres Reschini, from F2 Financial Solutions, has taken this into consideration “The news is good for the market” And? “This is probably a reason for a bullish wheel” but what The movement would not continue in the following days.
“I can’t imagine that this alone would be enough to spark a rally. Given the fact that reforms still need to be discussed and There are no details yet on how January’s debt repayment will be financed. for example,” he noted.
The Economist Gustavo Ber Reschini agreed, saying that there could be an initial positive reaction due to the broad result in approving the budget. “Even so, Investors will continue to monitor the financial strategy compared to 9E and the progress of structural reforms. looking for a new round of country risk compression,” he added.
In a recent interview with streaming channel La Casa, Economy Minister Luis Caputo explained that maturities are not a problem and that the government already has about half of the funds thanks to the Bonar 2029 issuance and purchases by the Ministry of Finance.
Argentina faces principal payments from Bonares (governed by local law) and Globales (governed by foreign law) of approximately $2.7 billion, to which is added an additional $1.6 billion in interest.
On the other hand, the official pointed out that the banks have offered $7 billion through a repo and that there are also the two swaps with China and the United States, so dollars can be obtained from that side. “There could even be a refinancing,” he predicted.
With that in mind, Ber said that Should sovereign risk fall from current levels (it closed at 581 basis points on Friday) to 450 basis points, greater funding depth could be achieved to encourage a full extension of maturities.
Still, he said there could still be some lower emissions to test and gain access to the market again.
On the other hand, Adrian Yarde BullerChief economist and strategist at Facimex Valores SA, said the government is already able to finance itself at single-digit interest rates, but the economic team may prioritize waiting for a sharper fall in interest rates and move forward with a new move in the meantime Repo with banks.
Regarding the approval of the Budget, he said he gave three very positive signs. Firstly, the government has shown Ability to articulate a very strong majority in the Senate, thereby setting an important precedent for discussing the next reforms. Secondly, he could do it Pass a balanced budget without having to make important concessions. And thirdly, he achieved this He needed parliamentary approval to bring debt under international law. something that is crucial for the release of the financial program.
“These signals will support a further decline in the country’s risk, which is expected to soon break through the 550-point level to move towards the 500-point zone.” he concluded.
President Javier Milei called the adoption of the budget law a “historic event.” “With these figures, there is no record of the approval of a balanced budget from a non-Peronist area. The only comparable one was the 2017 budget, but unfortunately it had a budget deficit,” he noted in his X account.
He also celebrated the passage of the Fiscal Innocence Law, which he said served to “make amends for the fraud that the state has perpetrated on Argentinians for 40 years, giving them back the freedom to use their savings and protecting them so that no future politician can take them away from them.”
As already mentioned, the threshold for simple tax evasion is raised to $100 million and that for serious tax evasion to $1,000 million. The statute of limitations for ARCA’s tax investigation was also changed, shortened from 5 to 3 years. In addition, anyone who does not comply and is notified can solve the problem by paying their debts, thus giving citizens all the necessary instances to normalize their tax situation without having a criminal problem.
Milei said that Argentine citizens who adhere to the simplified income tax system would be protected forever, allowing them to normalize their wealth situation by paying profits only for their turnover and regardless of their change in wealth.
“I would like to invite all Argentines who have fled for years from inflation, stocks or all the atrocities of the political leadership, to join the new simplified income system and be able to use their savings forever safely. In 2025 we break the inertia of Argentine decadence. In 2026 the reconstruction of the Argentine nation begins,” he concluded.
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