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ECONOMY | 25-01-2021 23:31

Government doesn't expect to resume IFE payments this year

Argentina will not need a new version of the Ingreso Familiar de Emergencia (IFE) scheme, implemented last year during the coronavirus pandemic, a senior government official has told Bloomberg.

Argentina will not need a new version of the Ingreso Familiar de Emergencia (IFE) scheme, implemented last year during the coronavirus pandemic, a senior government official has told Bloomberg.

The government is working from a base scenario in which restrictions on the circulation of citizens will not be restricted nationwide, as was the case last March, said the official, who asked not to be identified because the talks are private. 

While some restraints on trade were imposed when cases rose back in October, they were milder than the 2020 full lockdown.

Avoiding strict limitations on circulation will decrease the need for another round of the emergency welfare payment for vulnerable sectors, including the unemployed and independent workers.

A spokesman for the Economy Ministry declined to comment.

At its peak, before being gradually dismantled, the IFE programme reached nearly nine million citizens, or around 20 percent of the country's population, with a monthly payment of 10,000 pesos (US$116) for three months. 

The IFE scheme is one reason why the government reported a primary fiscal deficit, which excludes interest payments, of 6.5 percent of gross domestic product in 2020, much larger than the gap of 0.4 percent registered in 2019.

The welfare payment has not been not included in the 2021 budget, but some government officials have previously said its resumption would depend on the progress of the virus. 

Without the emergency payment, the government expects to reduce its primary deficit this year to 4.5 percent of GDP. Reducing the deficit will be a key part of discussions with the International Monetary Fund over a new financing agreement.

Argentina owes around US$44 billion of the record US$57-billion credit line granted by the IMF to the Mauricio Macri administration in 2018. The government is seeking to delay repayments, which are due to begin later this year.

 

– BLOOMBERG [with reporting by Patrick Gillespie & Jorgelina do Rosario]

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